3 out of 10 Elderly People Are in the Blind Spot of Long-term Care Services

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[Asia Economy Reporter Oh Hyung-gil] Although aging is progressing rapidly, it has been found that more than 30% of elderly people do not receive nursing care services. This means that 3 out of 10 elderly people are in the blind spot of nursing care services. As the elderly care market is expected to grow rapidly, there are calls for insurance companies to take action to secure market dominance.

On the 4th, the Korea Insurance Research Institute conducted a survey on 2,094 elderly people who are not receiving long-term care services in its recent report titled "Current Status of Elderly Long-Term Care Services and Directions for Enhancing the Role of Insurance Companies."

According to the survey results, 34.7% of elderly people who need long-term care services are not receiving them and are living without any assistance. They cited reasons for not receiving family help as their children’s lack of financial capability (50.0%) or because the children’s households have other children to care for (25.0%).

Korea introduced the Elderly Long-Term Care Insurance in 2008 to provide nursing care services. However, many are unaware of such services or do not know whether they are enrolled. As of 2017, the number of long-term care insurance beneficiaries was 585,000, accounting for only 8% of the total elderly population.

On the other hand, 39.1% of elderly people receiving nursing care services were getting help from cohabiting family members, and 26.1% were receiving help from non-cohabiting children or others nearby. Among the elderly receiving nursing care services, 70% of the care costs were borne by their children, and 26.6% by themselves, with 81.5% responding that they felt an economic burden on their household due to nursing care costs.

On the 8th, job seekers are lining up to enter the 2020 Public Institution Recruitment Information Fair held at the aT Center in Seocho-gu, Seoul, hosted by the Ministry of Economy and Finance. Photo by Mun Ho-nam munonam@

They expressed a desire to be covered by private insurance to fill the gap left by public insurance. Among respondents, 63.5% indicated an intention to subscribe to private long-term nursing care insurance, with particularly high interest among those aged 60 to under 65.

Nursing care insurance was first launched in 2003 and is currently sold by most life insurance companies such as Samsung Life, Hanwha Life, and Kyobo Life, along with dementia insurance. However, the subscription rate is only 2.5%. The highest rate is 4.8% among those in their 60s, followed by 3.4% in their 50s, and only 1.2% and 1.4% in their 40s and 30s, respectively.

The report predicted that, like advanced countries, insurance companies are likely to expand their entry into the nursing care insurance market. In Japan, to respond to aging, insurance companies are given opportunities to actively participate in nursing care businesses, and the supply of insurance products such as nursing care insurance is actively carried out.

Kang Sung-ho, a research fellow at the Korea Insurance Research Institute, suggested, "It is necessary to recognize that nursing care is different from illness and requires preparation separately from medical expenses, and to make thorough preparations in advance." He added, "The insurance industry needs to consider how to respond to and secure a leading position in the new elderly nursing care market."

(Source: Korea Insurance Research Institute)

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