Brought to you by AIA, the largest life insurer in the world
Between the years 1998 and 2018, Cambodia was one of the fastest-growing economies in the world with an average growth rate of 7.7% per year, according to World Bank data. This astonishing level of growth has impacted Cambodia in numerous ways, none more so than in a boost to average income, evidenced by the country gaining lower-middle income status in 2015, and a surge in life expectancy of roughly 23% between 1998 and 2013, according to data from the National Institute of Statistics of Cambodia. These increases, however, are beginning to cause a wave of new challenges, particularly regarding financial planning for old age.
According to the National Aging Policy, 2017-2030 – a government policy focused on improving the wellbeing of elderly Cambodians – there will be an average annual increase of 4% in the elderly population from 2020 to 2030. In stark contrast, the growth of the working-age population will be just 1%. This means that over the next decade or so, there is expected to be an ever-increasing number of elderly people, with a shrinking working-age youth population to financially support them.
This contrast is further evidenced by the Population Ageing in Cambodia report published in 2016, which examined the Potential Support Ratio, a measure of the number of working-age persons aged between 15-64 per 100 people aged 65 and over. By 2030, the support ratio, essentially the number of people an elderly person can rely on for financial support, is set to fall to 9.3 persons – a marked decrease from the 15.5 persons in 1998.
This will potentially upend the long-held tradition of younger generations taking care of elderly family members when they reach retirement, making saving up enough money during working life a pressing priority for many.
This could perhaps be why the life insurance industry is currently experiencing a boom in the number of premiums issued, with more people taking advantage of solutions that keep them protected while providing financial help in the event of tragedy.
In the Insurance Association of Cambodia’s latest report, published this year, the total gross premiums issued in Cambodia rose an astonishing 30 percent in 2018. The growth of life insurance premiums was a key driver to this growth, surging an incredible 50.6%.
With what appears to be an urgent desire for tailored life-insurance solutions that can help Cambodians create a financial cushion in their old age, AIA Cambodia has proposed a new arrangement for its flagship policy, AIA សម្រាប់ជីវិត (Samrab Chivit), to reflect this need.
Customers will now receive 25 years of coverage, but only pay for 15, offering ten years of free protection. If they have no need of their policy during that time, they will also receive back all their money in a lump sum plus a 20% return on their investment – the highest figure offered by any life insurer in Cambodia.
AIA សម្រាប់ជីវិត has been arranged so that Cambodians can get the desired protection from a life insurance premium, while also having the ability to build their fortune over the course of their working lives. This money can then be used to take care of themselves in old age, to re-invest or to pass on to their children for better education or a business venture.
AIA management Pauline Teoh said: “Financial planning for later life and saving up money are becoming ever-more important to people in Cambodia. That’s why we are proud to be offering AIA សម្រាប់ជីវិត to reflect exactly what most Cambodians need and want. Providing a return equal to 120% of their total premium is the highest rate offered in the Cambodian life-insurance industry, so we are hugely excited about the impact that this policy will have on helping people live better lives free from the stress and worry of saving for old age.”
It seems a solution has been here all along if you want peace of mind from a protection that guarantees the highest return. It’s now up to you whether want to start piling up your fortune from now on for your own benefit later down the road.