Compare living payouts with the protection left to your family
Korean death benefit liquidation gradually reduces part of the death protection in a whole life policy and pays the corresponding surrender value during the policyholder’s lifetime.
It can provide cash after retirement, while reducing both the death benefit and surrender value left in the contract.
This calculator uses an actual insurer illustration to show that exchange between living cash and family protection.
It checks age and contract conditions, then compares cash already received with the death benefit remaining at a selected point in time.
Access to cash today and protection for dependants serve different needs, so read both measures before choosing a ratio or payout term.
Korea-specific, using the 2026 system and insurer quotes
The context is the 30 October 2025 introduction and 2 January 2026 expansion to eligible Korean life insurers.
Official sources were checked on 6 October 2026.
No premium, assumed interest rate or conversion rate is invented: the calculator sums the pretax amounts you enter.
Approval, claim settlement, lifespan and final taxation require separate confirmation.
Which contracts meet the application conditions?
The Financial Services Commission (FSC) describes the following joint conditions for the institutional rider.
An earlier eligibility message does not establish that the policy still qualifies if a policy loan or contract change occurred afterwards.
A screen result saying conditions are met reflects your entries and is not an insurer approval.
Age and death benefit
- At least age 55 at application
- A fixed-interest whole life policy with a base death benefit no more than KRW 900 million
- No separate income or asset test
Premium history and policy relationships
- Both contract duration and premium payment period are at least 10 years, with premiums fully paid
- A monthly-premium policy with the same policyholder and insured
- No policy loan balance at application
Variable insurance, interest-linked policies, short-pay whole life, and contracts designed with CI advance payments or interim benefits are official examples of exclusions.
Confirm the particular rider with the insurer rather than relying on the policy name.
Premium waivers, contract changes and prior benefits can require review of the current fully paid status and protection.
Enter both the payout and remaining death benefit
Two columns from the same selected quote
Use pretax payout | death benefit immediately after payment, one row per period, from one consistent ratio, term and commencement illustration.
A 10-year annual quote requires 10 rows; a 10-year monthly quote requires 120 rows.
Do not mix cash amounts from a new ratio with benefit balances from an older quote.
Obtain and enter a complete new schedule after changing the selected terms.
Missing is different from zero
Enter 0 for a policy loan only after confirming that none remains.
Leave it empty if you have not checked it.
Apply the same distinction to surrender proceeds, required protection and tax reference amounts.
An unconfirmed alternative should stay withheld rather than appearing as an actual zero-value quote.
Thousands commas are accepted within amounts, and the two columns can be separated by a vertical bar, tab or semicolon.
Remove headings and total rows.
An incorrect row count, increasing remaining benefit or final benefit that does not match the selected ratio withholds the projection.
If insurer rounding differs by more than KRW 1, confirm the basis of that illustration before reconciling the entries.
Liquidation ratio and family-receipt formulas
The liquidation ratio is a reduction in death protection, rather than a cash conversion yield.
The maximum is 90%, and the payout term is selected in whole years with a minimum of 2 years.
The UI limit of 60 years is an implementation limit, not a statutory maximum duration.
Pretax comparison formulas
- Final death benefit reference = original death benefit × (1 − liquidation ratio)
- Full living payouts = sum of all period-specific insurer-quoted payouts
- Family cumulative receipts at a selected time = cash already received + remaining death benefit at that time
- Difference versus keeping = family cumulative receipts − original retained death benefit
- Final protection shortfall = required death protection − final benefit, floored at zero
The official example reduces 80% over 20 years by 4% of the original benefit each year.
The funding surrender value grows at the contractual rate, so a cash payout is not identical to the face amount reduced.
For monthly payouts, this calculator does not invent a benefit-reduction method: it uses the actual balance entered for each period.
The full payout condition is strictly total payouts > premiums already paid; equality does not pass that check.
How to use the insurer illustration step by step
- Confirm the current policy: Obtain the base death benefit, premiums already paid, contract and premium periods, loan balance and rider structure.
Do not assume that an old policy certificate still describes the current contract.
- Request ratio and term comparisons: Identify the cash-gap period and family protection target, then request the matching insurer tables.
Enter a new schedule when the ratio or term changes.
- Enter every actual period: Paste the payout and death-benefit columns and identify the quote source.
Keep learning examples labelled as synthetic rather than confirming them as actual insurer tables.
- Compare a common point in time: Select elapsed months, such as 60, to inspect cash and death protection.
Compare an early death, the payout end and later years instead of considering only the final benefit.
- Save and confirm: Download the TXT review or print the inputs, source context and unresolved items for a family or insurer discussion.
Personally verify whether an actual application or rider change was completed afterwards.
Synthetic example: KRW 100 million, 90% over 10 years
Assume age 65, a fully paid policy with a 25-year contract duration and 20-year premium period, an original death benefit of KRW 100,000,000 and paid premiums of KRW 60,000,000.
Annual payouts are KRW 6,100,000, 6,300,000, 6,500,000, 6,700,000, 6,900,000, 7,100,000, 7,300,000, 7,500,000, 7,700,000 and 7,900,000: KRW 70,000,000 in total.
The benefit after the first payment is KRW 91,000,000 and falls by KRW 9,000,000 per period to KRW 10,000,000.
This is a synthetic test illustration, not an actual product rate or insurer quote.
Synthetic cash, death benefits, family receipts and differences versus keeping at selected times| Comparison point | Living cash | Death benefit | Family receipts | Vs keep |
|---|
| Before first payment · age 65 | KRW 0 | KRW 100,000,000 | KRW 100,000,000 | KRW 0 |
| 60 months · age 70, before next payment | KRW 32,500,000 | KRW 55,000,000 | KRW 87,500,000 | −KRW 12,500,000 |
| 120 months · age 75 | KRW 70,000,000 | KRW 10,000,000 | KRW 80,000,000 | −KRW 20,000,000 |
| 180 months · age 80 | KRW 70,000,000 | KRW 10,000,000 | KRW 80,000,000 | −KRW 20,000,000 |
Full payouts of KRW 70 million exceed the KRW 60 million of paid premiums; cumulative cash recovers those premiums at the ninth payment, when receipts reach KRW 62,100,000.
Family cumulative receipts nevertheless never reach the retained KRW 100 million benefit in this example.
The monthly equivalent is approximately KRW 583,333, which does not mean identical monthly cash payments.
A KRW 50 million family protection target leaves a KRW 40 million shortfall after the benefit falls to KRW 10 million.
Distinguish early death and payment timing
The selected scenario is immediately before the next payment at the entered elapsed month.
The reference annual timeline assumes beginning-of-period payments at months 0, 12, 24 and so on.
At month 60, only payments at months 0, 12, 24, 36 and 48 have been included.
Month 0 means before the first payment; month 1 includes that first payment.
Actual same-day order, unpaid amounts and rider settlement follow the insurer illustration and policy wording.
The final balance is not the benefit at every earlier time
A 90% ratio does not establish that every point in time leaves only 10% protection.
In the annual example, five payments leave KRW 55 million while ten leave KRW 10 million.
Confirm whether monthly benefits are reduced monthly or annual reductions are combined with monthly cash installments.
The calculator uses the quoted benefit immediately after each included payment, and assumes no suspension or reapplication.
Payouts do not keep increasing after the quoted term has ended.
Compare keep, surrender and reduced paid-up alternatives consistently
Keep a fully paid policy or surrender it
Keeping uses the original death benefit with no further base-policy premiums assumed.
Surrender uses confirmed net proceeds after loan, tax, unpaid premium or other deductions.
The example surrender amount of KRW 55 million is also synthetic and carries no assumed investment return.
Do not retain a death benefit after surrender or add a surrender value on top of a death benefit under the keep scenario.
Use a confirmed reduced paid-up quote
Reduced paid-up conversion changes protection while stopping remaining premiums.
For a liquidation-eligible policy that is already fully paid, it may be unavailable or provide no useful alternative.
Confirm actual availability and the benefit before using it.
Missing or unconfirmed quotes remain unavailable rather than being replaced with zero.
Use the separate reduced paid-up calculator if remaining premiums and rider status need a fuller comparison.
Family cumulative receipts include cash that may already have been consumed for living expenses.
They differ from assets surviving at death, an inheritance-tax base and actual investment performance.
Document the cash need, spouse living costs, dependant status and other death protection alongside the comparison.
Review the KRW 1.5 million cap and tax exemption separately
Income Tax Act Enforcement Decree Article 25(9) treats installment annuities funded by a death-benefit reduction as a conversion to savings insurance.
Article 25(10) provides an original-payment-date exception when all relevant conditions are met, including a monthly-premium protection contract with benefit no more than KRW 900 million, fully paid premiums, identical policyholder, insured and annuity beneficiary, and payouts after age 55.
The scheme’s two 10-year duration conditions differ from the tax rule’s 5-year monthly-premium condition.
The monthly cap is only a reference threshold
For contracts subject to that branch, compare confirmed monthly premium average × liquidation ratio + other monthly-premium policy aggregate with KRW 1,500,000.
For example, KRW 1,000,000 × 90% + KRW 600,000 = KRW 1,500,000, meeting that particular cap.
Changing the other aggregate to KRW 600,001 produces KRW 1,500,001, exceeding it.
Neither result establishes final taxability, exemption or withholding.
Enforcement Rule Article 12-2 uses relevant-year basic and additional premiums and elapsed months, and can include basic premiums for other monthly-premium contracts even after their payment period has ended.
Contracts from 1 April 2017 and older contracts can follow different branches: confirm which applies.
Use the insurer-confirmed average instead of dividing lifetime premiums by lifetime payment months.
Uniform premiums, prepaid periods within 6 months, changes, the original payment date and the actual annuity beneficiary still require review.
Practical situations and limits
An income gap after retirement
If cash is needed between retirement and public pension commencement, inspect the actual payments in that interval first.
An annual amount can be allocated across a monthly budget without changing its bank deposit date.
If the quoted payments increase later in the term, review whether early living costs require another funding source.
Protection and care costs
If a spouse depends on the death benefit or medical and care expenses are expected, review the final protection shortfall before selecting the maximum ratio.
Liquidation provides cash by using some existing protection.
Rather than forecasting illness or death, put actual quotes and the family living-cost plan in the same review document.
- Loan repayment may change eligibility, so confirm the balance again at application.
- Suspension or reapplication does not establish automatic restoration of prior reductions and needs a new illustration.
- Check linked-rider settlement separately from independent-rider continuation, and budget any further rider premiums separately.
- Amounts are pretax. Consumption, inflation, investment returns, inheritance tax and service-based care benefits are excluded.
Frequently asked questions
Do I receive 90% of the death benefit in cash?
The 90% limit refers to the reduction in death protection.
Payouts are funded by the surrender value of the contract, so multiplying the death benefit by 90% does not establish the cash amount.
Use the actual insurer illustration for the selected ratio and term.
Does every whole life policy qualify at age 55?
Age is only one condition.
Check fixed-interest whole life coverage, the KRW 900 million limit, fully paid premiums with both contract and premium periods of at least 10 years, a monthly-premium policy, identical policyholder and insured, and no policy loan.
Variable, interest-linked, short-pay, CI advance-payment and interim-benefit structures are official examples of exclusions.
The insurer must confirm the eligible rider.
Can I multiply the first payout by the number of years?
The official guidance explains that annual payouts increase with the underlying surrender value.
Repeating the first payout can misstate both the full total and cash received before an early death.
Enter every quoted period.
Annual averages and monthly equivalents are budgeting references rather than actual equal installments.
Does an early death leave only the final death benefit?
Use the remaining benefit after payments already made at that time.
Annual reduction of 90% over 10 years differs from reducing the entire 90% at the start.
Settlement when death and payment occur on the same date, unpaid monthly installments and riders must be confirmed from the actual contract.
If payouts exceed paid premiums, am I better off than keeping the policy?
Premium recovery measures cash received while alive.
The family comparison adds that cash to the remaining death benefit and compares it with keeping the original policy.
These are different amounts and timing measures.
Cash already spent still counts as cumulative receipts, so this total is neither estate assets remaining at death nor an inheritance-tax base.
Is the policy tax exempt if monthly premiums are below KRW 1.5 million?
The monthly cap is one condition for contracts to which that rule applies.
Check contract date, premium duration, uniform and prepaid premiums, the original-payment-date exception, the policyholder, insured and annuity recipient, and other monthly-premium policies.
Older contracts can follow different branches.
The calculator does not determine final exemption or after-tax payouts.
Does suspension restore the benefit already reduced?
The official guidance allows suspension, early termination and reapplication.
Those options do not establish automatic restoration of reductions already made.
Obtain a new illustration for future payouts and protection, and confirm linked-rider settlement and independent-rider status.
Are monthly payments and remote applications available at every insurer?
The FSC allowed remote applications from prepared insurers in 2026 and described monthly payouts as a phased rollout.
Confirm the current service at your insurer.
For monthly payments, obtain the actual monthly payout, remaining-benefit and death-settlement schedule rather than dividing an annual payout by 12.
Official sources and update basis
Current-law status and article text were checked directly through the National Law Information OPEN API on 2026-10-06.
Application conditions come from FSC scheme guidance; exemption conditions come from tax rules; policy-specific amounts come from the insurer illustration.
- FSC overview and expansion to age 55, 19 August 2025 and launch guidance, 22 October 2025
- FSC expansion release and attached Q&A, 23 December 2025: Appendix 1 conditions, Appendix 2 Q8 annual reductions and Q10 pretax illustrations
- Income Tax Act Enforcement Decree Article 25: MST290841, effective 2026-10-01; Enforcement Rule Article 12-2: MST286379, this article effective 2026-05-22, with a partial statute commencement of 2026-07-01 in the search listing
- Financial Consumer Protection Act Article 19: MST277247, effective 2026-01-02; Commercial Act Article 638-3: MST273629, effective 2026-09-10, explanation duties and policy wording
Recheck changes in contract scope, age, limits, premium requirements, monthly-payment availability, payout and reduction timing, and contract-date tax branches.
Remote consultation, suspension and reapplication arrangements can differ by insurer.
A saved comparison does not establish application completion or the effectiveness of a contract change.
Review the payout table alongside family protection
After checking conditions and receipts, obtain current illustrations and written rider and tax confirmations from the insurer.
Do not transplant the synthetic amounts into an actual policy.
Use family protection and living-cost needs to compare the available terms, and keep unresolved items in the consultation review.