Financial Supervisory Service Releases Key Complaints on Simple Insurance on the 13th
"Simple Insurance More Expensive Than Regular Insurance"
"Check Eligibility for Regular Insurance First"
With the entry into a super-aged society, the popularity of simplified underwriting insurance (insurance for those with pre-existing conditions) is increasing. However, as the emphasis is placed solely on easy enrollment, consumers often neglect their duty to disclose information before signing the contract, leading to numerous cases where insurance claims are denied.
According to the Financial Supervisory Service on the 13th, the number of simplified insurance subscriptions last year was 6.04 million, a 47.1% increase compared to the previous year. Simplified insurance reduces the obligation for applicants to disclose past medical history, allowing those with chronic diseases such as hypertension and diabetes to enroll. Although the disclosure items are reduced, premiums are higher than those of general insurance. It covers diagnosis fees for serious illnesses such as cancer and cerebrovascular diseases, as well as hospitalization and surgery costs. The coverage may be less comprehensive than general insurance.
Because only the ease of enrollment is emphasized, it is common for healthy individuals to subscribe to simplified insurance without checking whether they qualify for general insurance. Although simplified insurance offers more limited coverage than general insurance, many disputes arise from unawareness of these product details when filing claims. Additionally, many claims are made shortly after enrollment, often related to severe illnesses such as cerebrovascular diseases linked to pre-existing conditions, resulting in frequent requests for medical consultations during claim reviews, making the process more complicated. Consequently, complaints are also frequent.
Mr. Kim received a recommendation for a fine-needle aspiration biopsy due to a 'benign thyroid nodule' found in a health checkup within three months before subscribing to simplified insurance. However, he answered 'No' when asked about the need for additional tests (re-examination) during the insurance contract. After being diagnosed with thyroid cancer post-enrollment, he filed a claim, but the insurer canceled the contract citing failure to disclose the need for additional tests. If a doctor’s diagnosis or opinion indicates hospitalization, surgery, or the need for additional tests within three months before enrollment, it must be disclosed.
Mr. Kwon had been hospitalized 1 year and 11 months ago but mistakenly thought it was over two years ago and answered 'No' to the question about hospitalization within two years. Misreporting due to misunderstanding the application questions can also lead to contract termination for breach of disclosure obligations. Mr. Won did not know that the removal of colon polyps counted as surgery and answered 'No' to the question about surgery within two years when subscribing to simplified insurance. Surgery due to endoscopy is also subject to disclosure, and failure to report it can result in contract cancellation.
Mr. Park, a cancer patient, recently subscribed to simplified insurance. He had been hospitalized for chemotherapy within five years of enrollment. However, since his cancer diagnosis was six years ago, he thought he did not need to disclose the related hospitalization. The application form requires disclosure if any diagnosis, hospitalization, or surgery related to cancer occurred within five years, and Mr. Park was penalized for violating the disclosure obligation.
An official from the Financial Supervisory Service stated, "If you are recommended to subscribe to simplified insurance, you should first check whether you qualify for general insurance. If you do not accurately disclose the information asked in the application form, your insurance contract may be canceled or your claim denied."
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