Plan to help the elderly

Efforts needed to address the issues that make homeowners and financial institutions wary of houses for pensions

This month the State Council pledged to complete a social care network for people aged 60 or above by 2020. Among the proposed policies that are dedicated to serving the world's largest elderly population, the reverse mortgage loan plan has received mixed responses.

Under the policy, which is better known as a house-for-pension program, homeowners can deed their house over to an insurance company or bank, which will have the house appraised and calculate the applicant's life expectancy and then pay out a fixed amount of money every month. This would allow the elderly to live in his or her own house and receive regular payments for as long as they live. After they pass away, the house will be sold to repay the loan principal and interest, and the mortgagees will benefit from the increased value of the asset.