Start a Pension in Your Child’s Name—But You Get Paid First? Korea’s Two-Generation Annuity Strategy
💬 “Isn’t this pension for my child’s future?”
That’s what most Korean parents say when they start a pension plan under their child’s name.
But here’s the twist:
The parent receives the pension first.
Surprised?
Welcome to one of the smartest retirement hacks trending in Korea today.
It’s called the “two-generation pension plan.”
🔍 How Does This Work?
It’s all about the beneficiary settings in Korean annuity insurance.
| Role | Who |
|---|---|
| Policyholder | Parent |
| Insured Person | Child |
| Beneficiary | Parent initially |
➡ This allows the parent to receive the pension even though the policy is under the child’s name.
➡ After the parent passes away, the beneficiary automatically switches to the child.
📌 Result: A seamless two-generation income stream from a single pension policy.
💡 Why Register Under the Child’s Name?
✅ Lower Premiums
→ Younger insured persons = Lower actuarial risk
→ More benefits for the same monthly payment
✅ Flexible Payout Timeline
→ For example: Start payout when the child turns 30
→ But parent is the initial beneficiary = Parent receives payments starting at age 60
✅ Access to High-Yield Products
→ Like guaranteed 8% simple-interest variable annuities
→ Combines stability with long-term growth potential
👨👩👧 Real Case Study – Client A
| Child’s Age | 0 years old |
|---|---|
| Product Type | Variable Annuity (8% Simple Interest Guaranteed) |
| Premium | 200,000 KRW/month × 10 years |
| Payout Start | Child’s age 30 → Parent age 60 |
| Beneficiary | Parent (first), then child |
💰 Total Expected Benefits
| Phase | Monthly Payment | Duration | Total |
|---|---|---|---|
| Parent’s Benefit | 500,000 KRW | 20 years | 120,000,000 KRW |
| Child’s Benefit (after) | 700,000 KRW | 30 years | 252,000,000 KRW |
| Grand Total | 372,000,000 KRW |
All from a single policy.
That’s the power of a multi-generational pension design.
⚠️ Key Things to Watch
✅ Check the Beneficiary Settings!
→ If the child is listed as both the insured and beneficiary, the parent cannot receive payments.
→ Be sure to designate the parent as the initial beneficiary.
✅ Tax Planning Is Essential
→ Depending on the amount and structure, this may trigger gift or inheritance tax
→ Consult with a tax professional for long-term planning
✅ Product Conditions May Vary
→ Some insurers do not support automatic beneficiary succession after death.
→ Always read the product guide and contract clauses carefully.
✅ Key Takeaway
Setting up a pension under your child’s name allows you to:
-
Pay lower premiums
-
Receive income during your own retirement
-
Seamlessly pass the benefit to your child without disruption
It’s one of the smartest and most cost-effective retirement strategies available today.
If one pension plan can prepare two generations for retirement,
what could be more efficient?
🗓️ Coming Next
👉 “Got a Lump Sum? Monthly Income Starts Tomorrow: The Power of Immediate Annuity”
A perfect fit for retirees—
we’ll break down the structure of lump-sum pensions and why they work.
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