[Insurance Tip ①] I Have Two Indemnity Insurance Policies, Should I Cancel One?

Even with Duplicate Subscription to Indemnity Insurance, Premiums Are Not Doubled, So There Is Little Actual Benefit

[Asia Economy Reporter Changhwan Lee] # Park, a worker in his 20s, recently faced a dilemma regarding his indemnity medical insurance. He already had indemnity insurance that his parents had signed him up for, but recently his company enrolled him in a group indemnity insurance plan. At first, he was happy to have two indemnity insurance policies, but his joy was short-lived when he learned that having two indemnity insurances does not mean double coverage when he gets sick. Now, he is considering whether to cancel one of them.

# Kim, a housewife in her 30s, thought that by signing up for multiple indemnity medical insurances like other types of insurance, she could receive more insurance payouts. So, she enrolled in indemnity insurance from two different companies. However, five years later, after injuring her leg and receiving inpatient treatment at a hospital, she claimed 1 million KRW in medical expenses from both insurance companies. Each company paid her 450,000 KRW after deducting a 100,000 KRW deductible, totaling 900,000 KRW, which made her regret having overlapping indemnity insurance policies.

Indemnity insurance has become so common that it is often called the second National Health Insurance. However, unlike general insurance, even if you have multiple indemnity insurances, they only cover the actual medical expenses you paid, and no additional payouts are made. Therefore, overlapping coverage should be avoided as much as possible.

If a policyholder has two indemnity insurances and receives treatment at a hospital, when they claim the medical expenses from the insurers, the two companies share the payout within the range of the actual medical expenses paid by the policyholder.

Having two or three policies does not mean you get more insurance money; it only means you pay more premiums, so there is no real benefit to overlapping coverage.

Source: Financial Supervisory Service

However, overlapping coverage is not entirely without advantages. It can have the effect of expanding the coverage limits. Insurance payouts are made up to the coverage limits of the products you have enrolled in, within the maximum actual inpatient medical expenses of 50 million KRW and outpatient medical expenses ranging from 200,000 to 300,000 KRW.

For example, if Park had outpatient medical expenses of 500,000 KRW due to an MRI (Magnetic Resonance Imaging) scan at a tertiary hospital, and he had only one indemnity insurance, he could receive up to the maximum coverage limit of 300,000 KRW. But if he had two policies, the coverage limit would increase to 600,000 KRW, allowing him to receive 400,000 KRW after deducting a 20% deductible.

Therefore, people who frequently use expensive medical procedures such as MRI or CT (Computed Tomography) scans and want to increase their indemnity insurance coverage limits can exceptionally have overlapping indemnity medical insurance policies.

However, unless in such exceptional cases, experts including the Financial Supervisory Service advise that overlapping indemnity medical insurance should be avoided because having multiple policies does not mean receiving double insurance payouts.

Additionally, it is important to know that indemnity insurance does not cover all medical expenses. According to the Financial Supervisory Service, costs related to cosmetic surgery aimed at improving appearance, nursing care fees, health checkups, vaccinations, medicines purchased without a doctor's consultation, and non-pharmaceutical products are not covered by indemnity medical insurance.