The head of Hong Kong Mortgage Corp’s annuity team says the life-annuity scheme is more popular among those aged 65 to 70.
Speaking ahead of today’s deadline for subscriptions, chief executive Edmond Lau Ying-pan said the overall response to the scheme has been within expectations, RTHK reported. Lau said one subscriber is more than 90.
Lau said take-up of the HK$10 billion quota for the scheme should not be used as a yardstick to judge its success. Mortgage Corp will instead look at discussion in the community and whether general awareness of the scheme has been raised. He added: “The HK$10 billion ceiling on subscriptions is actually not our sales target. It’s only a ceiling reflecting our risk management concerns. So it will not be judged by whether we’ll be able to achieve that amount.”
Lau said he thinks it is “more important to look at the result by way of judging the public reaction, whether the first sale of the scheme has indeed aroused interest among the public about various pros and cons of the scheme and also other investment products.”
Mortgage Corp will consider future adjustments to the scheme after analyzing the subscription data.
But Lau said it is unlikely that the minimum age of 65 for subscribers will be lowered in the short term. He said the age limit was set to fill a gap in the market, and that other products are available for those under 65.
Lau also said the 4 percent rate of return is unlikely to be adjusted. But he did not rule out the possibility of increasing the maximum amount a subscriber can invest. It is currently HK$1 million.
Applicants can invest in a single premium ranging from HK$50,000 to HK$1 million in exchange for monthly payments. For a single premium of a maximum HK$1 million, the guaranteed monthly annuity payment for a 65-year-old man would be HK$5,800, while it is HK$5,300 for women.
Monthly returns for men are higher than those for women because females have a longer life expectancy. Applicants will receive notices of allotment from next month and will be told to attend sales meetings to complete the procedures.
Subscribers may receive the annuity payment as early as November. The plan can be surrendered within the guaranteed period but may incur a loss.