Samsung Life Insurance, Total Contracts Worth 75.5 Billion KRW in 5 Days
Kyobo Life Insurance Completed 71 Deals by the Previous Day
#Office worker Mr. Lee (47) joined an insurance claim rights trust for a death benefit of 650 million KRW to financially support his intellectually disabled child A (21) even after his death. Upon Mr. Lee's death, the trust contract was designed to pay A a lump sum of 50 million KRW and then 3 million KRW monthly for 10 years starting the following month, followed by 2.5 million KRW monthly thereafter.
As the trust market, estimated to reach up to 90 trillion KRW, opens up, life insurance companies are actively targeting insurance claim rights trusts. Industry leader Samsung Life Insurance secured trust contracts worth 75 billion KRW within just five days of launching the product.
According to financial authorities on the 21st, Samsung Life Insurance secured 156 trust contracts within five days of launching the insurance claim rights trust. The total contract amount reached 75.5 billion KRW. The largest number of contracts fell under the 300 million KRW category (96 contracts), with an average subscription amount of about 120 million KRW. There were 23 high-value subscribers exceeding 1 billion KRW, with an average amount of 2.05 billion KRW.
An insurance claim rights trust refers to a service where the trust company manages and operates the insurance benefits received by the customer and pays them to designated beneficiaries. It is designed to ensure that assets are used according to the policyholder’s wishes in unexpected situations and to prevent inheritance disputes in advance. For example, death benefits can be left entirely to children rather than a spouse who neglects child-rearing obligations. Assets can be distributed annually on anniversaries instead of being inherited all at once by children who lack financial literacy.
In fact, Mr. Choi (66) joined Samsung Life Insurance’s insurance claim rights trust because he wanted his 300 million KRW death benefit to be used for his grandchildren’s college tuition. According to the contract, Samsung Life Insurance pays 100 million KRW to each of the three grandchildren when they reach adulthood. Mr. Kim (69) signed a trust contract to give his 50 million KRW death benefit as a wedding congratulatory gift to his grandson. If the grandson remains unmarried until age 40, a lump sum payment is made.
A Samsung Life Insurance official said, "Insurance claim rights trusts are not products preferred only by the wealthy; there is also a broad public demand for insurance benefits to be used meaningfully. Especially, death benefits under 300 million KRW are often paid as lump sums at times such as children’s college entrance or marriage, allowing bereaved families to remember the deceased."
Samsung Life Insurance is not the only company entering the insurance claim rights trust market. Since the 12th, other insurers have also announced their 'first contracts' as death benefits can now be managed as trust assets. Kyobo Life Insurance’s first contract was reportedly designed by a woman in her 40s diagnosed with terminal cancer for her elementary school-aged child. The 600 million KRW death benefit will be paid monthly at 3 million KRW for nine years for education and living expenses. Additionally, 100 million KRW will be paid in the year the child enters university, and the remaining approximately 200 million KRW will be paid upon university graduation.
Kyobo Life Insurance has signed a total of 71 insurance claim rights trust contracts as of the previous day. The company explained that since September 2022, it has proactively established related organizations by securing comprehensive property trust specialists and building systems and infrastructure. A Kyobo Life Insurance official said, "More than 40 experts, including trust specialists, lawyers, and tax accountants, collaborate to assist with insurance claim rights trust consultations and contracts, which is a distinctive feature of our company. We have designated comprehensive property trusts as a promising new business for the aging society and are implementing related projects with company-wide interest and active support."
The first insurance claim rights trust contract at Heungkuk Life Insurance was with a male executive in his 50s. He arranged for interest-only payments on a 500 million KRW death benefit until his child turns 40, with 50% of the insurance money paid when the child turns 40 and the remaining 50% when the child turns 45. A Heungkuk Life Insurance official said, "Since the insurance claim rights trust market opened, we have received various inquiries and plan to continuously launch trust products that can help customers’ financial stability."
As of the first half of this year, the outstanding balance of death coverage contracts at 22 life insurance companies was approximately 883 trillion KRW. With a new market theoretically close to 900 trillion KRW opening and the ability to secure solid revenue sources at low cost by linking with previously secured insurance contracts, competition in the financial sector is expected to intensify further.
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