[Companies Overcoming COVID-19] Life Insurance Evolving Amid COVID-19 and Low Interest Rates

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[Asia Economy Reporter Oh Hyung-gil] Life insurance that pays out benefits upon death is continuously evolving to adapt to the low-interest-rate era. Simple enrollment insurance products have also emerged that cover diseases or accidents and allow people with pre-existing conditions such as hypertension and diabetes to subscribe.

According to the Life Insurance Association on the 27th, the global economic recession caused by the spread of the novel coronavirus infection (COVID-19) has highlighted the necessity of life insurance due to increased anxiety about health and economic crises for oneself or family members.

Life insurance aims to provide coverage against personal risks such as survival, death, and illness by paying a predetermined insurance benefit when an accident occurs. Death insurance, a type of life insurance, is a livelihood protection product that resolves the financial difficulties faced by the bereaved family upon the insured's death and is divided into whole life insurance and term insurance.

Whole life insurance is a representative death coverage product with lifelong coverage, paying the agreed insurance benefit regardless of when or how the insured dies. Term insurance differs in that it only covers death within the agreed period. Recently, life insurance companies have been adding various riders to whole life insurance, providing not only accident protection but also savings functions to accumulate assets simultaneously.

When subscribing to whole life insurance, the focus is on coverage for the death and illness of the breadwinner until the children graduate from university. If emergency funds are needed, the universal feature allows partial early withdrawal from the premiums paid or the use of policy loans.

Additionally, life insurers have recently introduced non-surrender and low-surrender whole life insurance products that reduce the refund amount upon cancellation during the premium payment period but lower the premium burden, thereby reducing consumer costs.

For a 40-year-old male subscribing to a death benefit of 100 million KRW, the monthly premium for whole life insurance is 264,000 KRW, whereas the non-surrender refund type is about 54,900 KRW.

Previously, people with pre-existing conditions such as cancer, hypertension, and diabetes, as well as the elderly, faced some restrictions in subscribing to whole life insurance, but now simple underwriting allows subscription even up to the 60s.

An industry official stated, "From birth to death, people are exposed to many risks, and if health problems arise for oneself or family members, it is necessary to prepare for the resulting economic losses," adding, "It is a rational choice to review life insurance products to prepare for risks to life and property."

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