Key considerations before taking up the plan

Tips for retirement

The HKMC Annuity Plan is tailored for the elderly, but it may not suit everyone’s needs. For example, the plan may not work well for seniors who have limited funds but have steady income flows. Since the applicants will have to pay a lump-sum premium upfront, due consideration has to be given to one’s financial situation and money management needs.

Applicants can invest between $50,000 and $3 million. Although the plan guarantees each annuitant a return equivalent to 105% of the premium paid, you still have to take into account your personal situation before applying for the plan. Do not invest all or great part of your money as this will lock up your money. In case you need to surrender the policy, you will incur a loss as the surrender value will be discounted. Partial surrender will also be subject to the terms and conditions of the policy. As the guaranteed monthly annuity payment is fixed, purchasing power may be eroded by inflation, especially when over a period of time.

Policy owners can apply for special withdrawal to pay for the medical and dental expenses. The withdrawal amount would be the lower of 50% of premium paid, or the premium paid minus the cumulative guaranteed monthly annuity payments paid. Special withdrawal is subject to a maximum amount of $300,000 and can be made only once.

The HKMC Annuity Plan and old age allowance

Currently, there is an income and asset limit for the “Old Age Living Allowance” or “Higher Old Age Living Allowance” (see the website of the Social Welfare Department). If you are getting the allowance or considering applying for the allowance, you must understand how the premium and the fixed monthly payouts are calculated in the asset and income limit.

Will the HKMC Annuity Plan be calculated in the asset and income limit of the elderly?
  • One-off premium paid
  • Guaranteed cash value of an insurance policy
  • Surrender value received (if any) from early cancellation
  • Monthly annuity payment


While the premium paid for the HKMC Annuity Plan will not be included in the asset limit, the surrender value from early cancellation will be included in the asset limit of the Old Age Living Allowance and Higher Old Age Living Allowance. On the other hand, the guaranteed monthly annuity payout will be aggregated in the income limit. Should you have any questions about the calculation, you should first check with the Social Welfare Department.

Investing for parents

Those who are supporting their parents with a monthly allowance can consider investing in the HKMC Annuity Plan for their aged parents so that they can receive lifelong monthly annuity payouts from the plan instead. To make this arrangement for your aged parents, you should also take into account your financial capability, and understand if your parents are receiving the Old Age Living Allowance or Higher Old Age Living Allowance. Annuity plan is a long-term insurance plan that needs to be carefully considered taking into account the needs, affordability and alternative options.

9 May 2019