Elderly Aged 60 and Over Flock to Insurers' Household Loans... "Livelihood Loans"

[Asia Economy Reporter Bu Aeri] It has been revealed that the total amount of household loans from insurance companies for seniors aged 60 and over is rapidly increasing. As bank loans have become difficult to obtain due to loan regulations, a balloon effect appears to be driving loan demand toward insurance companies, which are relatively easier to access.

According to the 'Loan Amount Status by Industry' data submitted by the Financial Supervisory Service to Jin Sun-mi, a member of the Democratic Party of Korea, on the 4th, the total amount of household loans from insurance companies for those aged 60 and over stood at 11.4899 trillion won as of the end of March. Among these, mortgage loans amounted to 8.9786 trillion won, and unsecured loans reached 1.3838 trillion won.

The growth rate of household loans from insurance companies for those aged 60 and over exceeded the average for all age groups. As of the end of March, the total outstanding household loans from insurance companies increased by 1.1% from the end of last year to 66.258 trillion won, while the outstanding loans for those aged 60 and over increased by 2.9% to 11.4899 trillion won.

As of the end of last year, the total household loans from insurance companies for the 60 and over age group were 11.1625 trillion won, a 10% increase compared to the end of the previous year (10.148 trillion won). This is nearly twice the overall growth rate of household loans from insurance companies. At the end of December last year, the total household loans from insurance companies were 65.5308 trillion won, up 5.5% from the end of the previous year (62.1018 trillion won).

Looking at the types of loans, mortgage loans from insurance companies increased by 5.8% to 50.9584 trillion won at the end of last year compared to the end of the previous year (48.5751 trillion won), while the total mortgage loans from insurance companies for those aged 60 and over rose by 8% to 8.7265 trillion won compared to the end of the previous year (8.0814 trillion won).

The total amount of unsecured loans from insurance companies increased by 2.2% to 7.6268 trillion won at the end of last year compared to the end of the previous year (7.4651 trillion won). In contrast, the total unsecured loans from insurance companies for those aged 60 reached 1.3256 trillion won, a 17% increase compared to the end of the previous year (1.1333 trillion won).

The steep increase in household loans from insurance companies among seniors aged 60 and over is largely attributed to so-called 'livelihood loans,' known as insurance policy loans. Insurance policy loans are loans secured by the surrender value of insurance contracts, are not subject to the Debt Service Ratio (DSR) regulations, and can be obtained without separate screening.

Representative Jin said, "Due to loan regulations in the banking sector, seniors aged 60 and over are moving to insurance companies where DSR regulations are relatively lax. This situation increases the risk of defaults due to high interest rates," and emphasized, "Detailed measures are needed for seniors who are in a blind spot."

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