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AIA rolls out dollar pension as demand for foreign currency insurance grows
AIA Korea headquarters in Seoul / Courtesy of AIA Korea
By Jun Ji-hye
AIA Korea introduced a new U.S. dollar-denominated pension insurance product tailored to a rapidly aging society and earlier retirement, the company said Monday.
The launch comes as demand for dollar-denominated insurance has surged amid a sharp weakening of the won against the dollar. In such products, both premiums and payouts are made in U.S. dollars. They typically offer higher interest rates than dollar savings accounts while allowing policyholders to benefit from exchange rate movements.
AIA’s monthly interest-linked plan offers multiple incentives, including a pension enhancement bonus after a certain period, a bonus linked to U.S. interest rates and, for long-term policyholders, a high-value contract bonus of up to 15 percent of the basic premium at the start of pension payments.
“Because pension assets are intended to support an extended retirement, leveraging the U.S. dollar as a global safe asset helps maximize value and enables stable pension income over the mid- to long term,” an AIA Korea official said.
The product also provides a range of retirement planning and postretirement asset management services. After a set period, policyholders can use a lump-sum dollar pension conversion option to restructure their pension based on retirement timing and cash flow needs.
The policy allows for changes to the insured person, enabling family-oriented retirement planning as well as inheritance and gifting strategies.
Insurance payouts above a certain threshold can be transferred to overseas accounts in destinations such as the United States, Canada, Australia, Hong Kong and Singapore, making the product suitable for purposes such as overseas education expenses or living costs for family members abroad.
Amid robust demand for dollar-denominated insurance, initial premiums for foreign currency insurance products sold by life insurers operating in Korea rose 326 percent over the past year.
As of the third quarter of 2025, initial premiums totaled 24.3 billion won ($18 million), up from 5.7 billion won in the same period a year earlier.