Legacy and Retirement Planning

Premium Financing

Helps you pay part of the insurance premium.

Premium Financing

Based on a RWI* survey conducted in 2015, it was found that almost 59% of Hong Kong people are puzzled and uncertain about how much they really need to save for their retirement.

To make your retirement dreams and inheritance wishes come true, professional and comprehensive planning may provide a solution for you. Life insurance plays a role in your estate planning but may also be an effective tool to help boost your wealth for the next generation. Premium Financing services are also available if required.

Premium Financing
Helps you pay part of the insurance premium

  • Pledge your life insurance policy as collateral to secure a loan from your bank to pay for a portion of the premium
  • Enjoy a higher initial leverage ratio of premium to life insurance benefit
  • May act as an alternative to let you enjoy your wealth while leaving a lasting legacy for your loved ones
*The Retirement Wellness research, commissioned by DBS and Manulife represents the views of more than 6,000 non-retirees on their preparedness and expectations towards retirement. The research spans 6 countries: China, Hong Kong, Indonesia, India, Singapore and Taiwan. In Hong Kong, a total of 1,009 residents, aged 40 to 60 year old took part in the research which was conducted online by Nielsen in November 2015.


Mr. Client age 50 wants to purchase a life policy with US$1,073,000 lump sum premium^. Instead of paying the entire premium in cash, Mr. Client opts to pay only US$316,500 from his own assets and keep the remaining US$756,500 invested. He will then use premium financing for the remaining US$756,500# and use his current cash flow to make interest payments.

The above diagram is for illustration purposes only which may be subject to change and does not take into account your personal scenarios which can differ greatly from the above. Insurance products are not bank deposits and are not underwritten by DBS (Hong Kong) Limited.


^Based on male insured, Hong Kong resident, age 50, Standard Plus non-smoker, Level Death Benefit Option, Universal Life policy at 3.9% interest crediting rate (which is not guaranteed and subject to change). Changes in the interest crediting rate or cost of insurance rate may require additional premium to keep the policy in effect. Please consult your financial advisor, refer to the product leaflet for product features and policy contract for detail terms and conditions. You should seek independent professional advice for financial, legal, tax, accounting or regulatory adviser or fiduciary where necessary.


Important Notes:

  1. The borrower must maintain sufficient funds to pay interest. Failing which the bank has the right to recover the Total Premium Financing Outstanding Balance Due from the policy assigned
  2. In cases where the insurer failed to pay the NSV of the Policy to the bank, borrower is still obliged to repay the Bank the total premium financing outstanding balance due


#the bank finance amount used in the above example is based on below assumptions; actual arrangement is subject to the terms and conditions of Premium Financing
1. 1st day cash surrender value of the policy = US$890,000
2. Bank finance amount = 85% of 1st day surrender value of the policy = US$756,500 (US$890,000 x 85%)
%the leverage ratio in the above example refers to the ratio of the premium Mr. Client pays to the death benefit he entitles, and assumes no liability in the policy.
1. Leverage ratio without premium financing = premium client pays: face amount
    = US$1,073,000: US$3,000,000 = 1: 2.7
2. Initial leverage ratio with premium financing = premiums client pays: face amount less bank finance
    = US$316,500: (US$3,000,000 – US$756,500) = 1: 7.0
This example is provided for illustrative purposes. The calculations shown are a guide only and are not intended to provide financial, legal, accounting or tax advice to any person and should not be relied upon in that regard. The actual amounts that borrower repays / has to repay may vary significantly from the illustrations provided. No opinion provided, projections, assumptions and estimates are subject to change without notice to borrower. This document is for informational purposes only and does not constitute insurance advice nor is it an offer, solicitation or invitation to transact business.


Important Notes:

  1. The policyholder is subject to the credit risk of the insurance company
  2. If the policyholder discontinues and / or surrenders the policy in the early policy years, the amount of the benefits he / she will get back may be considerably less than the amount of the premiums he / she has paid
  3. A description of the past, current, projected and / or potential benefits and / or returns (e.g. bonuses, dividends, interests) presented is / are not guaranteed and is / are for illustrative purposes only
  4. The actual future amounts of benefits and / or returns may be lower than or higher than the currently quoted benefits and / or returns


Let us help you to put your planning into action

Please contact DBS now.


This webpage is for reference and it is intended for use in Hong Kong Special Administrative Region only. It does not constitute a contract of insurance or an offer, invitations or recommendation to any person to enter into any contract of insurance or any transaction described therein or any similar transaction. You should not base solely on this webpage to make decision on applying for the product. The information disclosed above is not exhaustive and you should refer to the policy provision and the leaflet for more information and if in doubt, please seek independent professional advice. You may contact our bank staff to obtain a copy of the policy provision and the leaflet for reference.

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