Insurance Companies Compete to Launch Products for the Elderly
Frequent Requests for Unnecessary Insurance and Re-enrollment After Cancellation
Authorities "Strengthen Crackdown on Illegal Sales"
The elderly dependency ratio of the working-age population in Gyeonggi-do is increasing.
[Asia Economy Reporter Oh Hyung-gil] Recently, office worker Park Jisoo (alias, 42) heard a complaint from her mother, who lives separately in the provinces, saying that she had signed up for insurance through an acquaintance a few months ago but found the insurance premiums too burdensome. When Park visited her parents' house on the weekend and looked at the insurance statement, she was shocked.
This was because her mother, who does not even have a driver's license, was persuaded by an agent that she could receive coverage for surgery and diagnosis fees, and ended up signing up for two driver insurance policies. Park said, "I am baffled at how they could sell driver insurance to a 70-year-old senior who doesn't even have a license," and expressed her outrage, saying, "Not only the unscrupulous agent but also the insurance company that just wants to sell at any cost should be held responsible."
Recently, as insurance products targeting people with pre-existing conditions and the elderly have been flooding the market, incomplete sales targeting these groups are occurring one after another, requiring consumer caution.
Typical cases include selling insurance that elderly people do not need by deception or requiring them to cancel existing insurance and re-subscribe to similar insurance.
In particular, since most of these products are simplified underwriting insurance that streamlines the insurance application screening items, there is also a view that the risk of incomplete sales is even higher. Some point out that insurance companies are competitively increasing products targeting high-risk groups to raise new contract rates, but this may worsen loss ratios due to increased insurance payouts in the future.
According to the insurance industry on the 25th, insurance products that have recently expanded the subscription age up to 90 years old are emerging like mushrooms after rain. Most share the common feature of allowing subscription through simplified underwriting combined with pre-existing conditions.
Simplified underwriting is a method that allows subscription if the applicant meets conditions such as: no hospitalization, surgery, or additional tests requiring a doctor's prior opinion within the last 3 months; no hospitalization or surgery due to illness or accident within the last 2 years; and no hospitalization or surgery due to cancer diagnosis within the last 5 years.
In particular, recently, a large number of products that allow subscription up to the age of 90 have been released. Last month, Tongyang Life Insurance launched a simplified underwriting product called 'Guardian Angel More Convenient Health Insurance,' with subscription ages ranging from 30 to 90 years old.
Samsung Fire & Marine Insurance's 'Super Simple Insurance for Chronic Disease Longevity Plus' allows subscription through simplified underwriting by only confirming whether the applicant has been hospitalized, undergone surgery, or received treatment for cancer, stroke, angina, etc., within the last 5 years. It is available for ages 15 to 90. Hanwha General Insurance's 'Very Convenient Health Insurance' covers ages 25 to 90.
Lina Life Insurance expanded the subscription age of 'Lina One Question Cancer Insurance' from 60 to 80 last month, and ABL Life's 'ABL Simple Subscription Health Insurance' also allows subscription up to 80 with simplified underwriting. Hanwha Life Insurance's 'Special Cancer Insurance' allows women to subscribe up to 80 and men up to 77.
Activation of Elderly Protection Insurance in 2013
The emergence of elderly insurance originated from institutional improvements in 2013 to activate protection insurance for the elderly. As the rapid aging increased the need for protection insurance among seniors, product design requirements were relaxed.
Since October last year, a designated person confirmation service has been in operation for those aged 65 and over, allowing designated persons such as children to be informed of the insurance coverage details and to take measures such as exercising the right to withdraw the subscription if the product is deemed inappropriate. However, this is not mandatory. Accordingly, complaints about incomplete sales by some large corporate agencies (GA) that do not properly inform elderly subscribers of risks are also increasing.
Some argue that, as cases of incomplete sales targeting the elderly are increasing, similar to the private fund redemption suspension incidents centered on banks and securities firms, sales confirmation measures for these groups should be strengthened.
A financial authority official said, "Making designated person confirmation mandatory as a necessary condition for insurance contracts could unjustly infringe on the free will of the elderly to subscribe to products," adding, "We will strengthen crackdowns on illegal sales activities through product sales monitoring systems and happy calls."
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