[1mm Financial Talk] "Caring for the Heart Too" Why Interest in Children's Insurance Is Surging

[Asia Economy Reporter Changhwan Lee] Recently, there has been a surge of interest in insurance products that care for children's mental health.

As social attention to the mental health of children and adolescents has increased following the COVID-19 pandemic, insurance companies have quickly launched products that cover treatment costs for children's mental illnesses, gaining significant attention.

According to the industry on the 27th, KB Insurance's "KB Geumjjokgateun Janyeo Insurance," launched in February, has sold over 50,000 policies to date. Sales have exceeded 4 billion KRW based on initial premiums, which is more than a 50% increase compared to the company's existing children's insurance products.

KB Geumjjokgateun Janyeo Insurance attracted attention by covering childhood autism, which is not covered by indemnity health insurance. Childhood autism is a mental disorder where children refuse contact with the outside world, and the number of patients has been rapidly increasing recently. It also broadly covers other conditions such as specific speech and language developmental disorders, attention deficit hyperactivity disorder (ADHD), and chronic tic disorder.

Hyundai Marine & Fire Insurance is also selling products that provide diverse coverage for children's mental health. Since February, Hyundai Marine & Fire Insurance has included special riders for tic disorder medication treatment in its representative children's insurance product, "Good & Good Children's Comprehensive Insurance Q."

Responding to the growing social interest in children's mental health, Hyundai Marine & Fire Insurance actively developed coverage for depression, panic disorder, and post-traumatic stress disorder in children and adolescents around 2020, incorporating these as riders in Good & Good Children's Comprehensive Insurance Q. This insurance product, launched in 2004, has been subscribed to by one out of every two newborns.

The reason insurance companies are focusing on children's mental health is that the number of mental illness patients, especially among children and adolescents, has been steadily increasing. According to a report titled "Trends and Implications of Mental Illness Incidence by Age Group" published last year by the Insurance Research Institute, the use of psychiatric medical services (number of visits) by the public increased by 9.9% in the first half of 2020 compared to the same period the previous year.

The report analyzed that mental illnesses have been steadily increasing, particularly among those in their teens and twenties. Especially among teenagers, patients with ADHD, specific speech and language developmental disorders, and tic disorders have increased. According to the Health Insurance Review & Assessment Service, mental and behavioral disorders among teenagers (ages 10-19) more than doubled in 2020 compared to 2016.

Increased social interest through media is also a cause. Recently, programs counseling children's mental health have gained great popularity on major broadcasting stations, which is interpreted as increasing interest in children's insurance accordingly.

An insurance industry official said, "Mental illnesses among children and adolescents have been steadily increasing, but the rise accelerated due to increased social stress caused by COVID-19. Since treatment costs for mental illnesses tend to be expensive, interest in insurance products that cover these costs seems to be growing."