"My Mother Is Missing"... Surge in Such Cases Prompts Insurers to Take Action [1mm Finance Talk]

Non-life insurers secure exclusive use rights for insurance products targeting dementia patients and their families
Life insurers add "dementia coverage" to existing products to increase market share
First-year premiums for dementia and caregiving i

Insurance companies are continuously introducing dementia and caregiving insurance products and services. This is seen as a strategy to secure a leading position in the market as the number of dementia patients approaches one million.

An image generated by ChatGPT depicting an insurance company presenting dementia and caregiving-related products and services to customers. ChatGPT generated image

According to the financial sector on September 9, Heungkuk Fire & Marine Insurance obtained a six-month exclusive usage right from the General Insurance Association’s New Product Review Committee on September 1 for a special rider that covers damages in the event of a missing dementia patient. This rider pays a one-time insurance benefit of 200,000 won to a guardian if the insured, who has dementia insurance, develops dementia and goes missing. This is the first time coverage for missing dementia patients has been introduced. Last year, there were 15,500 cases of missing dementia patients, a 26% increase compared to 2020.

Hana Insurance also obtained a six-month exclusive usage right last month for an insurance product that provides cognitive training by a professional instructor to policyholders diagnosed with mild cognitive impairment, the stage before dementia. If policyholders of the HanatheNext Dementia Caregiving Insurance add this rider, they can receive brain training-based education once a week, up to 48 times per year, upon diagnosis. This product was developed to slow the progression of dementia by combining practical face-to-face services with emotional support. In July, Hana Insurance signed a memorandum of understanding (MOU) with Daekyo New Life, a senior life solutions company, regarding this service.

KB Insurance also obtained a three-month exclusive usage right earlier this year for a new rider called “Clinical Dementia Rating (CDR) Scale Test Support Benefit,” added to its “KB Golden Care Caregiving Insurance.” The CDR is a representative test for assessing dementia severity, and this rider covers the cost of the test once per year. The cost of a CDR test is typically between 50,000 and 200,000 won.

While dementia and caregiving insurance has traditionally been a key market for non-life insurance companies, life insurance companies have also begun launching related products and services to secure market share. Life insurers are introducing a series of new products, such as whole life insurance combined with dementia and caregiving riders or ultra-long-term products with annuity conversion features.

MetLife Life Insurance launched the “(Non-Participating) Dollar Whole Life Insurance (No Surrender Value Type)” on September 1. This dollar-denominated insurance product allows both premium payments and insurance benefits to be made in US dollars. The product enables customers to add up to 30 new health riders, including those for dementia, cancer, and cerebrovascular diseases, according to their needs.

Kyobo Lifeplanet Life Insurance also became the first digital-only insurance company to launch dementia and caregiving insurance in March. The policy provides broad coverage from mild to severe dementia, with the coverage period set up to age 110. If the policyholder completes premium payments over 20 years and their parent does not develop dementia, the principal paid in premiums, plus a certain amount of interest, is returned tax-free.

KB Life Insurance has also strengthened its dementia education services. On the previous day, KB Life Insurance announced the expansion of its “KB Star Wealth Manager” team, a premium outbound organization for high-net-worth individuals, and established a senior education program related to dementia. In July, KB Life Insurance collaborated with the Gangnam-gu Dementia Safety Center to provide dementia partner certification training to 100 KB Star Wealth Managers and 60 employees from the New Business Promotion Division. They have also been officially certified as dementia partners by the Ministry of Health and Welfare.

As both life and non-life insurers aggressively introduce dementia and caregiving insurance products, the related market is expanding. According to the Korea Insurance Development Institute, in the first half of this year, the initial premiums for dementia and caregiving insurance from both life and non-life insurers totaled 82.1 billion won, reaching 83% of last year’s total (96.3 billion won). Initial premiums are a key indicator of new contracts and sales trends in the insurance market. As South Korea enters a super-aged society, with over 20% of the population aged 65 or older, efforts to prepare for the rising costs associated with dementia are increasing. According to the Ministry of Health and Welfare, the number of dementia patients in South Korea is expected to reach 970,000 this year, surpass 1 million in 2026, and reach 2 million by 2044. The number of people diagnosed with mild cognitive impairment, who are at high risk of developing dementia, is expected to reach 2.98 million this year and approach 4 million by 2033.