Don't Switch Just Because the Insurance Premium Is Cheap
You Must Withdraw the Switch Within 6 Months
#2. Mr. Park received a call from an agent recommending switching to 4th generation indemnity insurance. The agent encouraged Mr. Park to apply for the switch online, citing that the explanation comparing the existing insurance and the 4th generation indemnity insurance would be lengthy. Mr. Park then easily switched to the 4th generation indemnity insurance. However, after switching, he learned that for those who frequently claim insurance benefits like himself, the premiums for the 4th generation indemnity insurance could increase significantly, and he requested to cancel the switch.
The financial authorities emphasized that when switching generations of indemnity medical insurance, consumers should not blindly rely on the agent’s explanation but carefully consider their own situation before making a decision.
On the 1st, the Financial Supervisory Service announced consumer precautions related to indemnity insurance containing these points. Indemnity insurance is classified by sales period and coverage structure into 1st generation (old indemnity), 2nd generation (standardized indemnity), 3rd generation (new indemnity), 4th generation, and others (for elderly or those with pre-existing conditions). The 4th generation indemnity insurance generally has a higher deductible rate compared to previous generations but offers lower premiums.
However, when switching contracts, consumers should carefully consider not only the comparison items explained by the agent but also their own health status and medical usage tendencies. This is because the coverage scope, such as non-reimbursed Korean medicine treatment costs, may differ between existing indemnity insurance and the 4th generation indemnity insurance.
Signing the switch application form by hand or responding to complete sales monitoring can be used by the insurance company as evidence of complete sales in case of future complaints. Therefore, consumers are urged to fully understand the agent’s explanations and sign carefully.
To cancel a contract that has already been switched, the intention to withdraw must be expressed within 6 months after the switch application. However, if the withdrawal request date is more than 3 months after the switch application date, cancellation is only possible for contracts where no insurance claim events occurred between the 3-month mark and the withdrawal request date.
Additionally, although the 4th generation indemnity insurance generally has lower premiums compared to previous generations, consumers are advised to consider that premiums may increase in the future. This is because non-reimbursed special coverage premiums are adjusted based on the amount of non-reimbursed insurance claims received. If there is frequent use of non-reimbursed medical items, premiums may rise. For example, if non-reimbursed insurance claims exceed 1 million KRW in the past year, premiums may be increased by 100% to 300%.
Furthermore, explanations were provided regarding indemnity insurance enrollment for those with pre-existing conditions. A re-enrollment notice is sent by registered mail every 3 years to confirm the intention to re-enroll, and the recipient must express their intention to re-enroll upon receipt. Especially for those who enrolled in indemnity insurance for pre-existing conditions before January last year, if they receive the registered mail but do not express re-enrollment intention, the contract may be terminated. Therefore, if the address has changed, it must be reported to the insurance company in advance.
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