Just One Call Opens the Way to Cancel Insurance... "Be Cautious of Potential Losses"

Amendment to the Insurance Business Act Including Non-Face-to-Face Cancellation Processed by the Political Affairs Committee
"Insurance Cancellation Refund May Be Less Than Paid Amount"

On the 1st, the bill on the establishment and operation of the National Education Committee was passed in the plenary session of the National Assembly with 165 votes in favor, 91 against, and 5 abstentions. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Oh Hyung-gil] A path is expected to open for insurance contracts to be canceled remotely via phone or online. While insurance subscriptions can be done non-face-to-face, canceling insurance has required prior consent for remote cancellation, causing inconvenience.

According to the insurance industry on the 2nd, the National Assembly's Political Affairs Committee processed a bill to amend the Insurance Business Act containing such provisions the day before. However, the bill must pass the Legislation and Judiciary Committee review and then the plenary session, but there remains a variable as the ruling and opposition parties have yet to finalize the distribution of standing committee seats in the National Assembly.

The amendment includes provisions allowing consumers to cancel insurance contracts remotely even after the contract is concluded, provided they verify their identity as the policyholder through methods ensuring safety and reliability.

Currently, insurance contract cancellations via phone are possible, but not all subscribers can cancel this way. Only subscribers who agreed to contract cancellation via communication means such as phone or computer at the time of contract conclusion can cancel insurance contracts by phone.

There has also been criticism that while insurance subscriptions are possible remotely, cancellations are not, which goes against consumer rights. Last year, among non-life insurance products, contracts concluded via phone or online accounted for 15.7% of the total, showing that non-face-to-face subscriptions are common.

Vulnerable groups such as the elderly or disabled, who have difficulty moving, face challenges as they must visit insurance companies or meet agents in person to cancel insurance. Given the trend toward accelerating non-face-to-face interactions due to COVID-19, calls for improving insurance cancellation methods have been raised.

However, concerns have also been voiced about side effects if anyone can easily cancel remotely. Early cancellation of insurance may result in surrender values being less than the premiums paid or rejection of re-enrollment in the same insurance. The insurance industry advises utilizing premium payment deferral, reduction systems, or paid-up reduction systems that allow maintaining contracts rather than canceling for economic reasons.

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