Financial Supervisory Service Issues 'Consumer Advisory' on Universal Insurance

[Asia Economy Reporter Kim Jin-ho] The Financial Supervisory Service (FSS) has warned consumers to be cautious as complaints regarding incomplete sales related to universal insurance have been continuously reported.

According to the FSS on the 16th, the number of complaints received by the FSS related to universal insurance up to the third quarter of this year increased by approximately 11% compared to the same period last year.

Universal insurance is a product that adds functions such as mid-term withdrawal and premium payment deferral to endowment and pension insurance. Recently, complaints about incomplete sales due to insufficient explanation of key matters have been ongoing. Analysis of complaints revealed that the advantages of universal insurance were overly emphasized, leading to cases where insurance products were sold like bank deposit and withdrawal accounts or where protection-type insurance (whole life) was mistaken for savings-type insurance.

In response, the FSS urged consumers to be cautious, stating that there is insufficient accurate guidance on the functions and key features of universal insurance.

First, the FSS explained that universal insurance differs from bank demand deposit products and that mid-term withdrawals may reduce the coverage amount or insurance period. It also warned that if premium payment deferral continues, the contract may be terminated, and upon reinstatement after termination, a large lump sum payment may be required or reinstatement may not be possible.

Furthermore, the additional premium payment function is often not intended for savings purposes, and even if there is a reason for premium exemption under the terms and conditions, previously substituted premiums must still be paid.

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