Redesigning home reversion products to empower retirement for Singapore's public flat owners

This paper introduces an innovative sell-type home reversion product aimed at monetizing Singapore's public flats, serving as a new alternative to the existing Singapore Lease Buyback Scheme (LBS). This new product not only retains the LBS's guaranteed period of residence in the property along with life annuity incomes but also enhances the product features to meet specific homeowner needs, including the ability to age in place, flexibility in retaining part of the property, options for bequests, and guaranteed principal return. By incorporating these additional features, the new product seeks to stimulate greater demand for monetizing public flats among asset-rich but cash-poor homeowners. An actuarial pricing model is developed to establish a transparent and fair framework for justifying the cost of each product feature. Additionally, we present a cost-benefit analysis from both the provider and consumer perspectives to highlight the major contributions of the new product when compared to the LBS.