There has been a suggestion to introduce 'Yubyeongja Pension Insurance' for the elderly's retirement assets.
The Korea Insurance Development Institute recently reported in its "Risks in the Aging Era and Overseas Cases of Yubyeongja Pension Product Operations" that the total premium income of pension insurance by domestic life insurance companies decreased by an average of about 2.8% annually from 2017 to 2022.
With the elderly population expected to surpass 10 million this year and the ultra-aged society imminent next year, securing retirement assets for elderly Yubyeongja is becoming increasingly important. However, the domestic individual pension insurance market is shrinking every year.
The reasons for the stagnation of domestic pension insurance include a lack of pension products that meet consumers' diverse coverage needs and insufficient tax systems to encourage voluntary retirement asset formation.
The Institute emphasized, "Activating the individual pension insurance market for the increasing elderly Yubyeongja will help strengthen the social safety net," adding, "From the insurers' perspective, introducing products that respond to the coverage needs of the aging and Yubyeongja era can enhance the role of the social safety net."
The Yubyeongja pension insurance proposed by the Institute is a product that pays higher pension amounts to insured persons with below-average life expectancy. While general pension products are subscribed to by various age groups, Yubyeongja pension products are mainly subscribed to by the elderly in retirement.
The Yubyeongja pension market is most active in the United Kingdom, where the product was first introduced in 1995. Since then, its share in the pension market has gradually increased, exceeding 30% in 2020.
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