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Qualifying Deferred Annuity Life Insurance
An Annuity is a type of Life Insurance policy available in Hong Kong that can be an effective retirement planning tool. Under traditional annuity insurance products, payments from the insurance company may be available as soon as one month after the start of the policy.
However, with a deferred annuity, payments from the Insurance Company will not be provided to the policyholder until a specified length of time has passed.
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Qualifying Deferred Annuity Policy Scheme
Under Hong Kong Law, Taxpayers may claim a maximum deduction of HK$ 60,000 per assessment year for annuity premiums paid to qualifying plans. Annuity Life Insurance products that are qualified to be part of a taxpayer’s deduction are certified by the Hong Kong Insurance Authority and be eligible for a deduction with the Inland Revenue Department.
With many different insurance underwriters in Hong Kong, it can be difficult knowing what your options for a Qualifying Deferred Annuity Policy (QDAP) can be – with choices between benefits, payment periods, premiums, and even the annuity payment itself varying depending on the insurance company you choose to work with. To maximize the return offered by your policy, it is important to fully understand what is being offered by the annuity plan you are purchasing.
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QDAP Benefits and Options
Many Hong Kong Insurance companies offering QDAP certified products will allow you to tailor your plan in line with your future financial goals. Many Deferred Annuity plans will allow the policyholder to select:
- Choice of Payment Term – with options between 5 and 10 years
- Choice of Annuity Period – with disbursements available between 10 and 20 years
- Choice of Currency – with the option between USD or HKD
- Choice of when disbursements start – with some plans offering payments as early as age 50
Under all QDAP plans, the policyholder will receive guaranteed annuity payments which are fixed, and chosen by you, for the entire annuity period. However, under some products it is also possible to include “non-guaranteed” annuity payments, which may provide additional returns above the premiums paid.
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Why Choose a Deferred Annuity Life Insurance Policy?
The QDAP Scheme by the Hong Kong Inland Revenue Department and the Hong Kong Insurance authority allow individuals to take charge of their own financial future, while receiving a deduction on their annual tax assessment. By using a QDAP certified product, a policyholder is able to ensure that they have adequate financial support in their retirement age, while also taking advantage of tax law to their benefit.
It is important to understand that no two Qualifying Deferred Annuity Policies will operate in exactly the same manner, and your choice of insurer and plan will impact how effectively your policy can assist you.
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Free Hong Kong QDAP Insurance Consultations
For more information about Qualifying Deferred Annuity Policies in Hong Kong, or to request a free consultation with an expert Hong Kong insurance broker about your QDAP insurance options, please complete the short form on this page. Alternatively you may Contact Us and speak directly to an advisor now.
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