Parents' Filial Piety Product 'Dementia Insurance' Subscribers "Many Women and Elderly"

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] As the number of dementia patients rapidly increases, the number of people subscribing to dementia insurance is also rising. It was found that women subscribe to dementia insurance relatively more than men.

According to the report on implications for the elderly insurance market based on the dementia insurance subscription status announced by the Korea Credit Information Services, the number of new dementia insurance subscriptions in the first half of last year reached 1,362,000. This is three times the 434,000 subscriptions in the second half of 2018 and more than six times the 212,000 subscriptions in the first half of 2017.

In particular, products that cover mild dementia diagnosis increased 4.5 times compared to six months ago. The dementia insurance craze was driven by the successive release of products that exclusively cover dementia last year. The coverage, which was limited to severe dementia, has expanded to include mild dementia.

Dementia insurance is a product that pays insurance benefits in the form of diagnosis fees and nursing care fees upon dementia diagnosis, and is sold by both life and non-life insurance companies. Insurance benefits are paid after a certain period following a dementia diagnosis based on the CDR scale (Cognitive Dementia Rating scale measuring cognitive and social functioning).

These standalone products have lower premiums and greater coverage benefits compared to comprehensive products. The proportion of coverage for mild diagnosis (80%) is high, and the coverage period (up to age 90) is longer, strengthening dementia coverage compared to comprehensive products (mild coverage 29%, coverage period up to age 83).

The average monthly premium for standalone products was about 66,000 KRW, while comprehensive products were surveyed at 107,000 KRW.

Among standalone dementia insurance subscribers, women and the elderly were predominant. The proportion of female subscribers was 68.0%, higher than the 60.2% for comprehensive products.

According to the Central Dementia Center, as of last year, one in ten elderly people (705,473) was a dementia patient. It is estimated that the number will exceed 1 million in 2024 and surpass 3 million by 2050.

As of 2018, the proportion of women among dementia patients was as high as 62%, and the prevalence rate of dementia among the elderly population aged 65 and over also showed a higher proportion of women.

Also, the average number of dementia insurance policies held by standalone subscribers in their 50s was 7.2, the highest, followed by those in their 60s (6.4) and 70s (4.9), showing a tendency to decrease with age. The average monthly premium was also highest in the 50s. The average monthly premium for standalone dementia insurance subscribers in their 50s was 660,000 KRW, which is higher than 480,000 KRW for those in their 60s and 280,000 KRW for those in their 70s.

Kim Hyun-kyung, a researcher at the Credit Information Services, advised, "It is important for dementia insurance subscribers to consider the coverage range and financial capacity, subscribe to appropriate insurance, and maintain it for a long period."