Even if duplicate subscription to indemnity insurance is temporarily suspended, re-enrollment in the previous product becomes possible

Source: Financial Supervisory Service

[Asia Economy Reporter Changhwan Lee] If an individual temporarily suspends their personal indemnity medical insurance (indemnity insurance) due to group enrollment provided by their company, they will be able to reselect the previously better coverage product upon re-enrollment.

On the 4th, the Financial Supervisory Service (FSS) announced a policy titled "Measures to Resolve Overlapping Enrollment of Personal and Group Indemnity Insurance" that includes this content.

Indemnity insurance is a product that covers the actual medical expenses incurred by the insured for injury or illness treatment. Therefore, even if one is enrolled in multiple indemnity insurance policies, double compensation exceeding the treatment cost is not possible.

However, since some companies provide group indemnity insurance as a welfare benefit, there are many cases where it overlaps with personal indemnity insurance previously purchased.

Source: Financial Supervisory Service

According to the FSS, as of the end of March this year, about 1.33 million people have overlapping enrollment in two or more indemnity insurance policies since the standardization of indemnity insurance in September 2009. Among them, about 1.27 million (95%) have overlapping enrollment in personal and group indemnity insurance.

Until now, the FSS and the insurance industry have operated systems such as the personal indemnity insurance suspension system to reduce the double burden of indemnity insurance premiums when overlapping enrollment occurs between group and personal indemnity insurance.

Nevertheless, a major reason for the high number of overlapping enrollments was that when individuals temporarily suspended their personal indemnity insurance and later re-enrolled, they could only select insurance products sold at the time of re-enrollment, not the products they had previously purchased.

The FSS has improved the system through this policy so that upon re-enrollment after suspending personal indemnity insurance, individuals can choose between the "product at the time of re-enrollment" and the "previous product they had subscribed to at the time of suspension." This allows individuals to maintain the previously better coverage indemnity insurance product.

However, for those who subscribed to personal indemnity insurance after April 2013, since the coverage content changes periodically, if the change cycle has passed, they must select the product available at the time of re-enrollment.

A group indemnity insurance suspension system will also be newly introduced. Going forward, employees themselves will be able to directly apply to the insurance company to suspend group indemnity insurance without going through the contract holder (such as a corporation), and any refundable group indemnity insurance premiums arising from this will be paid directly to the employee, not the contract holder (corporation).

The FSS explained that after gathering opinions from the insurance industry, it plans to revise the insurance supervision enforcement rules within the year. The system is expected to be implemented after January next year, when policy changes and IT system adjustments are completed.

The FSS emphasized that through improvements such as the revision of the indemnity insurance suspension system, unnecessary double premium payments due to overlapping indemnity insurance enrollment will be minimized, thereby further strengthening the rights and interests of insurance consumers.

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