Revision of Product Terms Including Hospitalization Conditions on the 14th
Plan to Increase Coverage Limits for Treatment and Transport Costs
[Asia Economy Reporter Ki Ha-young] In the second half of this year, the compensation requirements for travel insurance, which previously required at least 14 days of hospitalization at a local hospital to receive insurance benefits, will be improved.
According to the 'Improvement Plan for the Transfer and Protection System of Overseas Korean Patients' recently announced by the government on the 5th, the Financial Supervisory Service (FSS) plans to revise unreasonable product terms such as the 14-day local hospitalization condition for travel insurance and increase the coverage limits for treatment and transfer expenses.
There have been criticisms that even if one subscribes to travel insurance, the strict compensation requirements in the product terms prevent beneficiaries from receiving practical benefits. For example, even in emergency situations, insurance payments for repatriation to Korea are only made if the patient is hospitalized at a local hospital for more than 14 days. If this condition is not met, patients must bear treatment and transfer costs amounting to tens of millions of won on their own.
The domestic travel insurance subscription rate is also low. As of 2019, it was 11.9%, which is lower compared to 75% in the United Kingdom and 34% in the United States.
The UK government recommends subscribing to travel insurance on its official website and provides precautions for insurance subscription along with a list of websites related to travel insurance information. It also advises confirming whether medical expenses for illness and injury and repatriation costs are covered. In the case of the United States and Canada, their official websites (Department of State and Ministry of Foreign Affairs) recommend subscribing to insurance that covers repatriation costs of more than USD 50,000 (approximately 60 million won).
The FSS plans to start discussions with the insurance industry in the second half of the year to determine an appropriate hospitalization period for insurance payments. It also intends to raise the coverage limits for treatment and transfer expenses to ensure practical insurance benefits. Currently, the coverage limits for treatment and transfer expenses vary by company products, ranging from several hundred thousand won to several tens of millions of won.
Based on the improvement plans resulting from discussions with the insurance industry, the FSS plans to have the industry voluntarily revise product terms and conditions. Additionally, to increase subscription rates, travel insurance subscription guidance and promotion will be conducted on the websites of the Ministry of Foreign Affairs and the Ministry of Culture, Sports and Tourism.
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