Newsletter
MINIMUM DEATH BENEFITS FROM INVESTMENT-TYPE LIFE INSURANCE
In order to maintain a minimum proportion of insurance cover for investment-type insurance products, the Financial Supervisory Commission has issued the Directions on the Minimum Ratio of Investment-Type Life Insurance Product Death Benefits to the Value of the Policy Ac-count, which took effect on 1 October 2007. The main points are as follows:
．Scope of application: (1) investment-type life insurance contracts entered into after the date when the Directions took effect; and (2) investment-type life insurance contracts aris-ing from the conversion of other insurance contracts, if such conversion was applied for after the date when the Directions took effect.
．The minimum ratios of death benefits to the value of the policy account are initially di-vided into three bands according to the current age of the insured, reducing as age increases. The ratio should comply with the following requirements at the time when the policy is taken out, and at each time the policyholder makes a premium payment:
1.Insured currently aged 40 or below: not less than 130%.
2.Insured currently aged between 41 and 70: not less than 115%.
3.Insured currently aged 71 or above: not less than 101%.
．The insurer should stipulate in the insurance contract the restrictions on premium payments and the mode of response if an insurance-type life-insurance contract does not comply with the above minimum ratios, and should appro-priately explain such matters to the proposer at the time of soliciting such business.