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The returns on retirement savings products sold by insurance companies appear to be lower than the interest rates on bank savings or deposit accounts.

Although tax deduction benefits are an attractive feature of retirement savings insurance, there are rising calls to improve their return rate.

According to data from the Korea Life Insurance Association and the General Insurance Association of Korea on Thursday, the average one-year retrospective returns on retirement savings insurance across insurers were recorded at 2.69 percent as of September.

The figures for life and nonlife insurance companies came to 2.5 percent and 2.87 percent, respectively.

By insurer, Hana Life's product showed the lowest return rate at 1.4 percent, followed by Kyobo LifePlanet's 1.49 percent, Mirae Asset Life's 1.53 percent and Shinhan Life's 1.68 percent.

In contrast, KB Life recorded the highest return among insurers at 3.96 percent, followed by Heungkuk Life's 3.74 percent and KDB Life's 3.61 percent.

Although some insurers' products recorded returns of around 3 percent, others' returns were still lower than the interest rates on bank savings or deposits.

According to the Korea Federation of Banks, the average interest rate on a standard 12-month term deposit at 16 domestic banks was 3.34 percent as of Wednesday.

Moreover, the actual return felt by policyholders is even lower due to fees taken by insurers. Last year, the average fee rate for retirement savings insurances was recorded at 0.48 percent.

As a result, retirement savings insurance reserves have been shrinking, totaling 71.9 trillion won ($51.4 billion) as of September, down 0.23 percent compared to the same period last year.

Retirement savings insurances provide consumers with a stable way to prepare for retirement through declared interest rates.

In addition, policyholders are eligible for year-end tax deductions of up to 16.5 percent of the deposits they have paid throughout the year, with the cap set at 4 million won.

Despite these benefits, there is a growing sentiment that insurers need to make more efforts to improve returns.

"We are well aware that the returns on retirement savings insurances are low compared to retirement savings managed by banks," an official from a major insurer said. "Insurers are working in various ways to enhance returns to retain customers."