SBA: "Medical Expenses Burden Increasing Every Year... Prepare with Disease Insurance"

Current Status of Medical Expenses in Korea (Source: Life Insurance Association)

[Asia Economy Reporter Changhwan Lee] As the medical expenses burden on the public increases every year, there is a claim that attention should be paid to disease insurance products from insurance companies that can prepare for this.

The Life Insurance Association announced on the 16th that as household medical expenses burdens increase, insurance companies are releasing various types of disease insurance products.

The association analyzed that the average annual increase rate of medical expenses per capita in Korea is 8.7%, about twice the OECD (Organisation for Economic Co-operation and Development) average of 4.4%. It emphasized the need to prepare in advance for the increased medical expense burden.

Korea operates a public health insurance system to cover medical expenses, but compared to major advanced countries, the proportion of public funds in medical expenses is low, which ultimately shifts the burden to households, it pointed out.

Therefore, it added that attention should be paid to insurance products that can reduce the medical expense burden.

The association explained that the main types of disease insurance sold by life insurers include coverage for the three major diseases, a 'DIY' type where consumers can directly design the coverage they want, and products with extended coverage periods up to 100 years old.

The three major disease coverage products are disease insurance that broadly covers cancer, cerebrovascular disease, and heart disease, which are the main causes of death among Koreans. The product design considers that among domestic causes of death, cancer (27.5%), heart disease (10.5%), and cerebrovascular disease (7.3%) account for a high proportion.

The DIY type features the ability for consumers to design coverage as much as they want at the desired premium level by utilizing various special contracts.

The 100-year coverage insurance is a product that allows enrollment up to age 90 and extends the coverage period up to 100 years, considering Korea’s rapid aging trend.

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