A larger monthly annuity is not always the stronger family outcome
A Korean private-annuity illustration usually makes the monthly payment the most visible number.
A shorter guarantee period may produce a larger life-annuity payment, yet it can leave fewer guaranteed monthly payments for the named beneficiary when the insured person dies soon after annuity commencement.
This calculator separates what the insured person receives from what the beneficiary receives, then values both streams at the annuity start date.
Owner stream
Net monthly payments through the assumed death month, subject to the selected payout type.
Beneficiary stream
Contractual monthly continuation from the month after death through the remaining guarantee term.
Support gap
The monthly and full-payment shortfall through the beneficiary support target age.
Scope of this Korea-specific comparison
Enter up to three actual monthly-annuity illustrations and up to three assumed death ages.
The tool does not reconstruct the insurer’s reserves, estimate a market payment, or attach mortality probabilities to the scenarios.
It is a deterministic contract cash-flow comparison, not a life-expectancy forecast or an insurance claim decision.
Supported annuity structures and model boundaries| Structure | Owner payments | After death | Required evidence |
|---|
| Life annuity with guarantee | Continues while the insured is alive | Remaining guarantee months after an in-term death | Guarantee term and beneficiary payment share |
| Fixed-term annuity | Stops at the entered payment term | Remaining term after an in-term death | Full payment term and post-death treatment |
| Outside this model | Joint-life or inheritance-annuity terms | Lump-sum conversion or separate death benefit | Product-specific insurer calculation |
How to transfer the actual illustration
- Gather the Korean policy schedule, wording, product explanation, and annuity commencement illustration.
Public disclosure can help locate products, but the wording issued for the held contract controls the comparison inputs.
- Compare rows with the same annuity start age and payment frequency.
Identify whether each row is a life annuity with a finite guarantee or a fixed-term annuity before copying the number of years.
- Determine whether the illustrated monthly payment is gross or net.
Set the combined deduction rate to zero when the amount is already net; otherwise enter only a deduction assumption you can document.
- Confirm the named insurance beneficiary and the percentage of the monthly payment that continues after death.
Beneficiary does not automatically mean every heir or even the spouse shown in the support analysis.
- Enter early, middle, and longevity checkpoints that your family wants to stress-test.
Read all scenarios because none is assigned a probability or presented as a forecast.
Present value, purchasing power, and timing
Time zero is immediately before annuity commencement and the first monthly payment occurs at month one.
The annual effective discount assumption is converted to an equivalent monthly rate, then each owner and beneficiary payment is discounted from its actual month.
The rate is not a Korean statutory figure, a declared-crediting guarantee, or the insurer’s investment return.
Do not add the two value measures
Present value answers what the future contractual cash flow is worth under the user’s opportunity-cost rate.
Purchasing-power value independently deflates fixed future payments using only the inflation assumption.
They are parallel views and must not be summed or double-discounted.
- Owner payments occupy months one through the assumed death month.
- Beneficiary payments begin in the next month and stop at the guarantee or payment-term endpoint.
- A fixed-term owner stream stops at the term even when the insured survives longer.
- Opportunity cost is the gap from the highest present value within the same death-age scenario.
Reproduce the fictional default example
The default case starts the annuity at age 65, deducts 5%, and discounts at 3% annually.
It compares fictional life-annuity illustrations of KRW 1.2 million with a 10-year guarantee, KRW 1.1 million with a 20-year guarantee, and KRW 1 million with a 30-year guarantee.
All three use a 100% monthly beneficiary share solely to make the calculation auditable.
Present values in the fictional age-70 death scenario| Guarantee | Owner · beneficiary months | Total nominal | Owner PV | Beneficiary PV | Total PV |
|---|
| 10 years | 60 · 60 | KRW 136,800,000 | KRW 63,507,240 | KRW 54,781,903 | KRW 118,289,143 |
| 20 years | 60 · 180 | KRW 250,800,000 | KRW 58,214,970 | KRW 130,900,123 | KRW 189,115,093 |
| 30 years | 60 · 300 | KRW 342,000,000 | KRW 52,922,700 | KRW 173,578,304 | KRW 226,501,004 |
In this fictional input, the 30-year option leads at an age-70 death, while the larger monthly 10-year option reaches about KRW 228,025,098 and leads at an age-88 death.
The leader changes near age 87.8333, or 274 months after annuity commencement.
Replacing the fictional monthly amounts with an actual insurer illustration will move or remove that crossover.
The beneficiary support gap answers a different question
The option with the largest combined present value can still miss the household’s monthly support target.
The calculator measures the beneficiary’s age at the assumed death month, counts support months through the target age, and applies the shortfall month by month.
Any payment above the monthly target is capped for the coverage ratio and is not carried forward to offset a later zero-payment gap.
Zero-payment gap
Months inside the support horizon with no beneficiary annuity at all.
The period after guarantee expiry is a common source of this gap.
Support coverage ratio
Beneficiary payments inside the horizon divided by the monthly support target total, capped at 100%.
Add emergency savings and other survivor income in a separate household plan.
Korean law and official-source boundaries checked in 2026
Korean Commercial Act Article 730 frames life insurance around the contractually agreed insured event, while Article 638-3 requires delivery and explanation of important policy terms.
Article 733 addresses beneficiary designation and change, which is why this page does not equate beneficiary with all legal heirs.
Financial Consumer Protection Act Articles 19 and 23 support checking material limitations and the delivered contract documents rather than relying on a marketing headline.
Insurance Business Act Articles 95-2 and 124 support process explanation and public comparison disclosure, but disclosure data does not replace the wording of an existing contract.
Current Korean law revisions used for the calculator boundary| Law | Law ID · MST | Articles checked | Effective date checked |
|---|
| Commercial Act | 001702 · MST 272919 | 638-3, 730, 733 | July 23, 2026 |
| Financial Consumer Protection Act | 013704 · MST 277247 | 19, 23 | January 2, 2026 |
| Insurance Business Act | 001532 · MST 265389 | 95-2, 124 | January 31, 2025 |
- The official Commercial Act Article 638-3 XML uses MST 272919 and an effective date of July 23, 2026.
- Article 730 and Article 733 were checked against the same revision.
- The Korea Life Insurance Association disclosure portal is a starting point for annuity product and company disclosures.
- Discounting and inflation are kept separate following the cash-flow method in NIST Handbook 135e2025, without importing a U.S. federal discount rate.
Frequently asked questions
Does life annuity mean the guarantee also lasts for life?
No.
Life usually describes owner payments while the insured is alive; the guarantee is commonly a finite period protecting remaining payments after an early death.
The exact Korean wording controls.
Does the spouse automatically receive the post-death stream?
No.
The support analysis uses a spouse-like beneficiary age for planning, but legal receipt follows the contract’s beneficiary designation and policy wording.
Which discount rate should I use?
There is no universal statutory answer for this comparison.
Use a consistent household opportunity-cost assumption and test zero, a base case, and a higher rate to see whether the ranking is sensitive.
Can I model a lump-sum death settlement?
Not with this version.
It models a fixed percentage of the monthly annuity continuing from the month after death; request a product-specific illustration for lump sums, joint-life continuation, or separate death benefits.
Turn the result table into questions for the insurer
Print the three scenarios and mark the guarantee start date, payment timing after death, beneficiary designation, gross or net basis, and any lump-sum conversion clause.
Confirm each field in writing before choosing an option, then combine the support-gap result with emergency savings, Korean National Pension survivor benefits, and other household protection.
This calculator is a map for reading the contract; it is not approved claim value, tax advice, or a mortality prediction.