Sales of foreign currency-denominated savings-type insurance plans in the fiscal year ended 31 March 2019 (FY2018) by five major life insurance companies reached a record high of approximately JPY3.6trn ($33.3bn), an increase of 50% from the previous year.

The five insurers are Nippon Life, Dai Ichi Life, Meiji Yasuda Life, Sumitomo Life, and T&D.

Dai Ichi Life reported the highest sales of such products among the five insurers, according to an analysis by Asahi Shimbun. The sales figure was JPY1.7trn which accounted for about 30% of the company's total premium income in FY2018. Nippon Life followed next with its sales of these plans exceeding JPY1trn for the first time last year.

The foreign currency-denominated insurance plans, sold largely through bancassurance, have become increasingly popular because of their high yield relative to yen-denominated policies.

Insurers offering these products allocate the premiums received to investments in foreign bonds and stocks. The value of the policies may change because of stock price fluctuations. Where the principal is guaranteed, this is usually in the foreign currency and customers are thus still exposed to exchange risk.

However, many elderly people misunderstand the plans as being similar to deposits. Under the plans, if the yen appreciates at the time of receiving the insurance proceeds, exchange loss will occur.