Korean Long-Term Care Insurance Enrollment Only 2.5%... Japanese Insurers Also Enter Nursing Care Business (Comprehensive)

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[Asia Economy Reporter Oh Hyung-gil] Although aging is progressing rapidly, it has been revealed 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, it is pointed out that insurance companies need to respond 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 answered that the reasons for not receiving help from family were due to their children's lack of financial capability (50.0%) or because the children’s households have children to care for (25.0%).

Korea introduced the Elderly Long-term Care Insurance in 2008 to provide nursing care services. However, a significant number of people 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 receiving 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.

They expressed a desire to be covered by private insurance to fill the gap in 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, 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.

Japan is opening opportunities for insurance companies to actively participate in nursing care businesses to respond to aging, and the supply of insurance products such as nursing care insurance is also actively carried out. According to the Life Insurance Culture Center of Japan, the nursing care insurance (kaigo rider) subscription rate in Japan reached about 14.1% of households in 2018.

Japanese insurance companies also participate in nursing care businesses, providing home and facility nursing care services. Representative services include home visits for nursing care, day and night nursing care, and home nursing support. As a facility nursing care business, they also operate paid elderly homes where elderly people are admitted and provided with bathing and meals.

In Korea, the only insurance company that has entered the nursing care business is KB Golden Life Care, a subsidiary of KB Insurance, which operates Wirye Village and Gangdong Care Center.

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

This content was produced with the assistance of AI translation services.