[Becoming an Insurance Insider] 26-Year-Old New Employee, Don't Buy Whole Life Insurance

[Editor's Note] Difficult insurance, a clear explanation of insurance that remains confusing even after listening. There is no bad insurance in the world, only insurance that does not suit me. The path to becoming an 'insurance insider' with easy-to-understand insurance is not far away.

[Asia Economy Reporter Oh Hyung-gil] Park Ji-won (alias, 26), who succeeded in getting a job last year, said, "Since I started working, I should have at least one insurance," and at her mother's recommendation, she was introduced to her mother's acquaintance, an insurance planner, and signed up for whole life insurance.

She was paying over 100,000 won monthly for the insurance premium but recently heard from a senior colleague at work that "whole life insurance is not suitable at a young age." A friend working at an insurance company also advised her to cancel it, saying it was absolutely unnecessary for her.

Park complained, "The planner recommended the insurance saying you never know when something might happen, but I don't understand why others say to cancel the whole life insurance."

When signing up for their first insurance at a young age, everyone looks for a good product. The desire to be covered for hospital bills in case of illness and to prepare for possible accidents is the same.

However, not knowing what to be covered for, some choose insurance that does not suit them. Experts suggest that people in their 20s and 30s should place whole life insurance at the bottom of their insurance options.

Whole life insurance is a product aimed at death coverage for the policyholder (insured), providing insurance money to the bereaved family upon death. In other words, the economic benefit the policyholder can receive from this insurance, i.e., the insurance payout, is practically almost none.

Since everyone dies eventually, all whole life insurance products pay out insurance money once unconditionally. As a result, while the insurance premium expenditure for death coverage is high, the coverage for cancer, brain, and heart diseases is designed to be narrower compared to long-term insurance.

Because of the feature of securing the livelihood of the bereaved family, insurance planners unanimously agree that this insurance mainly applies to men in their 40s and 50s, the period when economic activity is most vigorous and family living expenses are most needed.

Although there are exceptional cases of death at a young age, if the bereaved family is capable of economic activity, it is not recommended to bear high premiums and subscribe to whole life insurance for a long period.

This means that coverage for diseases, which have a relatively higher probability of occurrence compared to death, should be prioritized.

An insurance company official said, "The younger the age, the lower the risk of death, so we do not recommend whole life insurance," adding, "It is more important to receive appropriate treatment if you get sick or have a serious accident, and subscribing to insurance for that should be the priority."

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