MetLife Korea's dollar insurance enjoys popularity

A MetLife Korea employee introduces a product that takes premiums in Korean won and pays claims in dollars to a customer in this file photo. / Courtesy of MetLife Korea

By Kim Bo-eun

With the dollar sharply appreciating against the won, insurance products that take premiums and pay claims in dollars are drawing interest.

Among some products that have attracted attention are MetLife Korea's Universal Dollar Whole Life, launched in January 2018.

This was the first dollar-denominated interest-sensitive whole life insurance package in Korea, as MetLife pioneered the untapped market amid rising demand for dollar-denominated assets.

The whole life insurance product invests in U.S. treasury bonds or promising firms in the U.S., utilizing MetLife's asset management knowhow to attain high returns.

Under the Universal Dollar Whole Life Insurance, a policyholder pays a premium and receives the insurance product's benefits in dollars. A policyholder can pay the premium in Korean won.

MetLife's product has drawn 65,000 policyholders as of the end of May.

Universal Dollar Whole Life benchmarks MetLife Japan's policy. In Japan, foreign currency insurance accounts for about 30 percent of all policies in the market.

On the back of the popularity of the product, the company recently launched two additional products, the ISP and CEO Term Life.

The ISP is a product under which investments are made in U.S. long-term government bonds and corporate bonds.

It applies a high disclosure rate compared to won-denominated instruments, so customers can secure a target fund.

As of June, the credited interest rate is 3.2 percent and the minimum guarantee rate is 2 percent within 10 years of joining and 1.25 percent after 10 years.

CEO Term Life is designed to help a business owner protect his or her company by having access to liquidity in the event of death.

It can be an effective tool in a family business succession plan as the death benefits can be used to pay inheritance tax.

The product offers a competitive fixed rate of 2.5 percent and helps the business diversity its asset portfolio as the premiums are invested in assets denominated in dollars.