If an insurance company buys the house of an elderly person for NT$5 million and rents it back for NT$14,000 per month, a 65-year-old could receive approximately NT$20,000 per month after rent. Under such a system, beneficiaries would not have to worry about upkeep fees or the risks of losing money associated with buying or selling property.
Promoting reverse annuity mortgages would give the market one more financial product and help change the traditional Taiwanese concept of raising children to act as a safeguard for old age. Under this system, a house would serve as a safeguard after retirement. Furthermore, with Taiwan’s high homeownership rate, low birth rates and aging society, such a mechanism would be easy to promote under current policies. Supplementary policies would nevertheless be necessary, as would the establishment of a comprehensive quotation system for housing prices and an insurance system ensuring cooperation between banks and insurance companies.
Chang Chin-o is a professor in the Department of Land Economics at National Chengchi University. Yuan Shu-mei is a doctoral candidate in the department.
TRANSLATED BY DREW CAMERON
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