Banks and card companies mostly apply full age calculation
Insurance companies calculate using a separate 'insurance age' system
Unlike banks and card companies that already apply the international age system, the insurance industry applies a separate 'insurance age,' so consumers need to be cautious regarding the 'International Age Standardization Act' that will take effect from the 28th.
According to the financial sector on the 25th, most banks and card companies already use the international age system for product operations, so they believe there will be little change after the implementation of the 'International Age Standardization Act.' However, banks sometimes use the Korean age system when conducting internal investigations or preparing age-specific reports, and they plan to unify this to the international age. For example, previously, people in their 40s might have been classified by Korean age as those born between 1975 and 1984, but going forward, those aged 40 to 49 by international age will be considered in their 40s.
Last December, when the Financial Supervisory Service's amendment bill to unify the use of international age was passed by the National Assembly, it evaluated that "financial laws and related regulations either specify the international age or interpret age according to the Civil Act's period regulations, so there is expected to be no impact on financial sector operations or financial consumers."
However, the situation is different for insurance companies. Major non-life and life insurance companies apply 'insurance age' rather than international age when signing up for insurance products. Insurance age is calculated based on the international age at the contract date, where if less than six months have passed since the last birthday, the age is rounded down, and if six months or more have passed, the age is rounded up by one year.
For example, a person born on October 9, 1996, and another born on April 9, 1997, have birthdays six months apart but share the same international age of 26. However, when signing up for insurance on the same date, their insurance ages differ: 27 and 26, respectively. The person born on October 9, 1996, has an international age of 26 years and 8 months, which rounds up to an insurance age of 27, while the person born on April 9, 1997, has an international age of 26 years and 2 months, which rounds down to an insurance age of 26, causing this difference.
Since insurance premiums increase with insurance age, it is advantageous for consumers to sign up before six months have passed based on their international age at the contract date. However, due to mandatory regulations, some insurance contracts apply international age or specify age in individual terms, so consumers need to carefully check before purchasing products.
As this difference in age calculation methods causes inconvenience and confusion for consumers, opinions have emerged within the insurance industry to abolish insurance age and apply international age in line with the implementation of the International Age Standardization Act. A financial authority official told Yonhap News, "Since consumers may experience inconvenience by confusing international age and insurance age when signing up for insurance, we plan to review the possibility of unifying insurance age to international age in the mid to long term."
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