First house-for-pension pilot program to be introduced

China will run for the first time a house-for-pension pilot insurance program in four cities starting July 1, 2014 till June 30, 2016, the insurance regulator said in a statement on Monday.

Beijing, Shanghai, Guangzhou and Wuhan are covered by the program.

The detailed regulation came after the country's cabinet approved in September 2013 the house-for-pension program, also known as reverse mortgage program for retirees, aimed at raising retirement income and easing the fiscal pressure of rising pension needs of an aging population.

A reverse mortgage allows retirees to borrow money by putting their homes as collateral and get a fixed monthly payment. The insurance company which offers the service will be entitled to the property after the pensioner dies.

Qualified insurers are required to have been in operation for at least 5 years with a registered capital of minimum 2 billion yuan ($3.3 billion). People aged over 60 with sole ownership of properties will be eligible for the pilot program.

However, media reports have said earlier that many elderly people are unwilling to participate in the program due to factors such as the tradition to leave homes - a major asset - to descendents after death.