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Retirement Product Comparison: Annuity, Silver Bond, Reverse Mortgage & Policy Reverse Mortgage

 

7-min read

Updated on 2026-6-18

Author: AIA Content Editorial Team

Hong Kong has one of the highest life expectancies in the world. According to the Census and Statistics Department 1,  life expectancy at birth is 83 for men and 88 for women. As a result, retirement planning has become an essential topic for many people—especially when it comes to choosing the right retirement income tools. With more retirement products available, such as an annuity, Silver Bond, Reverse mortgage and Life insurance policy reverse mortgage, it's easy to feel overwhelmed. This article introduces the features, advantages, and trade-offs of these four retirement products to help you build a retirement plan that fits your needs.

Key Features of the Four Retirement Products

Annuity: Create Your Own "Monthly Pension" After Retirement

An annuity is a long-term insurance product designed for retirees who want a stable and predictable income stream. An annuity policyholder can make either a lump-sum payment or regular contributions, converting accumulated savings into a fixed monthly income in the future—similar to receiving a "monthly pension" after retirement. One of the most well-known annuity options is the government-recognised Qualifying Deferred Annuity Policy (QDAP). A key benefit is that eligible premiums may be used for tax deductions, subject to a combined annual deduction cap of HK$60,000 per tax year.
 
As a retirement planning tool, an annuity can provide stable passive income and help reduce exposure to market volatility. However, there are trade-offs: annuity returns are generally not high, and payouts typically include both guaranteed and non-guaranteed components. In an extreme scenario, the non-guaranteed portion of the payout may be zero.
Annuity-Annuity Hong Kong-Silver Bonds

Silver Bond: A Seniors iBond

Silver Bonds are retail bonds issued by the Hong Kong Government since 2016, designed specifically for seniors. They have a 3-year tenor and pay interest every six months. Returns are linked to inflation—similar in concept to iBond—so they are sometimes called a "Seniors iBond." Key differences between Silver Bonds and iBond include:
 
  • Silver Bonds are available only to seniors 2 (for example, the 2025 issuance was limited to application to holders of a valid Hong Kong Identity Card who were born on or before 31 December 1966), while iBond is open to anyone aged 18 or above. 
  • Silver Bonds generally offer a higher guaranteed rate. For example, the batch maturing in 2028 (Issue No. 03GB2810R) has a minimum guaranteed interest rate of 3.85% 3. In comparison, the iBond maturing in 2024 (Issue No. 03GB2406R; Stock Code 4246) had annualised rates ranging from 2% to 2.17% on its interest payment dates 4.
  • Silver Bonds are not tradable on the secondary market, but holders may redeem them with the Government before maturity at par plus accrued interest. iBond can be traded on the secondary market. 
 
Because Silver Bonds are issued by the Government, default risk is extremely low. As a near-zero-risk retirement product, returns of around 5% per year are generally considered relatively attractive, which helps explain why Silver Bonds are popular among seniors. The main limitation is the age restriction—young and middle-aged individuals cannot use Silver Bonds to plan for retirement earlier.
Silver Bonds-silver bond hong kong-hong kong silver bond

Reverse Mortgage (Elderly Mortgage): Unlock Home Equity While Receiving Monthly Income

A reverse mortgage (also known as an "elderly mortgage") is operated by the Hong Kong Mortgage Corporation Insurance Limited (HKMCI). It allows individuals aged 55 or above to use their residential property as collateral to obtain a loan. The loan is mainly paid out in an annuity-style monthly income, and borrowers may also apply for a lump-sum drawdown to meet personal needs. Unless the reverse mortgage is terminated under specific circumstances, borrowers generally do not need to make repayments during their lifetime and can continue living in the mortgaged property until the end of their lives. After the borrower passes away, the estate administrator may repay the reverse mortgage in full to redeem the property; otherwise, the property will be sold to settle the outstanding loan.
 
A reverse mortgage enables retirees to receive a monthly cash flow without making contributions and to access funds without selling their home. However, it is important to note that a reverse mortgage is a loan arrangement rather than a retirement investment product, and it does not in itself provide asset appreciation.
Reverse Mortgage-Elderly Mortgage-silver bond interest rate

Life Insurance Policy Reverse Mortgage: Pledge a Life Insurance Policy to Receive Monthly Income

A life insurance policy reverse mortgage is a retirement product operated by the Hong Kong Mortgage Corporation Insurance Limited ("HKMC"), a wholly owned subsidiary of HKMC. It is available to individuals aged 55 or above. In simple terms, it allows a life insurance policy as collateral to obtain a loan. Borrowers can choose to receive monthly income for a fixed period or for life, until the life insurance policy matures. In addition, borrowers may withdraw a lump-sum loan to meet personal needs. In most cases, borrowers do not need to repay the loan during their lifetime. The lending institution typically settles the full loan amount upon the borrower's death by using the death benefit proceeds of the life insurance policy.
 
As a retirement planning option, a life insurance policy reverse mortgage allows retirees to unlock the value of their life insurance policy with flexibility. Like a reverse mortgage, it is not a retirement investment product and does not create asset appreciation on its own. In addition, if you cannot fully repay the outstanding loan to redeem the policy, it may not fully align with the original intention, leaving life insurance benefits to loved ones.
Life Insurance Policy Reverse Mortgage-Policy Reverse Mortgage-retirement planning

Retirement Product Comparison at a Glance

Product Product Type Eligibility Key Benefits Considerations / Risks
Annuity
 Long-term insurance product Depends on the product; e.g., the Hong Kong Annuity Plan requires applicants to be Hong Kong residents aged 60 or above
 
1. Provides stable passive income and helps reduce exposure to market volatility
 
2. QDAP premiums may be tax-deductible (annual cap HK$60,000)
 
3. Hong Kong Annuity Plan offers lifetime guaranteed payouts
 
 
1. Generally modest returns 
 
2. Includes non-guaranteed elements; in extreme cases, non-guaranteed payout may be zero 
 
3. Early surrender may result in significant losses
 
Silver Bond
 Government retail bond Hong Kong residents aged 60+
 
1. Very low default risk (government-issued) 
 
2. Higher guaranteed rate (e.g., 2025 batch minimum guaranteed rate 3.85%)
 
3. Interest paid every 6 months
 
 
1. Not tradable on the secondary market 
 
2. Early exit requires selling back to the Government at par value 
 
3. Subscription age and allocation limits apply
 
Reverse Mortgage
 Loan arrangement Hong Kong residents aged 55+ (subsidised housing without premium paid requires 60+)
 
1. Provides cash flow without selling the home or making repayments
 
2. Borrower can live in the mortgaged property for life
 
3. Lump-sum drawdown may be available under certain conditions
 
 
1. No asset appreciation by itself 
 
2. A loan in nature; interest accrues on a compound basis 
 
3. Property age generally must be 50 years or below
 
Policy Reverse Mortgage
 Loan arrangement Hong Kong residents aged 55+
 
1. Flexibly unlocks the value of a life insurance policy
 
2. Generally no repayments are required during the borrower's lifetime 
 
3. Loan is typically repaid upon death using the policy's death benefit
 
 
1. Not an investment product; no appreciation by itself 
 
2. Policy must be fully paid-up and without an investment component 
 
3. If the policy is not redeemed, it may not fulfil the intention of leaving benefits to loved ones

 

Conclusion

Choosing the right retirement products is not only about your current financial situation and goals—it also depends on your risk preference, age, and overall asset allocation. After understanding the key features, pros, and cons of an annuity, Silver Bond, reverse mortgage, and life insurance policy, you can make a more informed decision based on your needs. In many cases, combining more than one retirement solution can provide broader protection and help you work toward a more comfortable retirement.

Retirement Products FAQ

The key is your asset allocation and risk preference. An annuity is suitable for those who want to convert savings into a stable monthly income, and a Qualifying Deferred Annuity Policy (QDAP) also offers a tax-deduction benefit. Silver Bonds are government-issued, near-zero-risk, and help hedge against inflation, making them suitable for seniors seeking a stable approach. A reverse mortgage and a life insurance policy reverse mortgage are "asset-unlocking" loan arrangements that allow you to obtain liquidity without selling your residential property or life insurance policy. In practice, many people choose to combine multiple products based on their needs to achieve more comprehensive retirement protection. 

Yes. After the borrower passes away, the estate administrator typically has priority and may choose to repay the total outstanding loan balance within a specified period to redeem the property or policy. If the estate administrator decides not to redeem, the lender will sell the pledged asset to repay the loan. If any balance remains after the loan is settled, the lender will return the surplus to the estate administrator or beneficiary. 

Different products provide different flexible arrangements. Both a reverse mortgage and a policy reverse mortgage allow borrowers to apply for "a lump-sum loan" to meet personal or medical needs. The Hong Kong Annuity Plan also provides a special withdrawal arrangement, allowing the insured to withdraw up to 100% of the remaining premium paid (capped at HK$1,000,000) to cover medical expenses. However, note that if an annuity is surrendered early, the amount received may be significantly less than the premiums paid.
This website is intended for viewing in Hong Kong only. The information provided is for general reference and does not constitute any sales advice, product recommendation, service offer, or solicitation. Before purchasing any insurance product, customers should complete a financial needs analysis. All product information on this webpage is for reference only and does not include the full policy terms. For details of product features, terms and conditions, exclusions, and key product risks, please refer to the relevant product brochure and policy contract. If you wish to review a sample insurance contract before applying, you may request it from AIA. Life insurance policies are long-term insurance contracts. If you surrender a policy in the early years, the amount you receive may be significantly less than the premiums paid. AIA does not guarantee the accuracy or completeness of the content and information provided, and AIA will not be responsible or liable for any content, services, and/or products referenced herein.

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  1. Census and Statistics Department, Statistics and you. Retrieved January 19, 2026, from censtatd.gov.hk website: https://www.censtatd.gov.hk/en/page_235.html
  2. Government Bonds, Silver Bonds - Highlight. Retrieved  January 19, 2026, from hkgb.gov.hk website: https://www.hkgb.gov.hk/en/infrastructurebond/infra_silver_Highlights.html
  3. Government Bonds, Silver Bonds – Issue Circular. Retrieved January 19, 2026, from hkgb.gov.hk website: https://www.hkgb.gov.hk/en/infrastructurebond/infra_silver_Issue_Circulars.html
  4. Government Bonds, iBond Series - Interest rates. Retrieved  January 19, 2026, from hkgb.gov.hk website: https://www.hkgb.gov.hk/en/retail/iBond_Rates.html

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