I Thought It Was a Savings Insurance, but It’s Whole Life Insurance... Be Cautious with Briefing Sales

[Asia Economy Reporter Changhwan Lee] Mr. A joined an insurance policy along with his colleagues during a break while attending the company's mandatory legal training (sexual harassment prevention) in November 2020, after listening to an insurance agent's explanation about a savings insurance plan to accumulate a lump sum. However, he later found out that the insurance was not a savings-type but a whole life insurance guaranteeing death benefits, and filed a complaint with the Financial Supervisory Service (FSS) requesting a refund of the premiums already paid.

Mr. B signed up for insurance after seeing phrases such as "savings," "annual compound interest 3.98%," and "limited time offer" in the insurance guide materials provided by the insurance agent. However, he later discovered that it was an annuity insurance with a monthly fluctuating declared interest rate, and that the materials were unauthorized promotional documents arbitrarily created by the agent.

Mr. C was introduced to a tax-exempt annuity insurance by an insurance agent who visited his office and signed up, but later found out it was a whole life insurance with death coverage. Mr. C filed a complaint with the FSS, stating that the product explanation was insufficient and that during the happy call conducted after the application, he only answered "yes" as instructed by the agent.

The FSS stated that consumers should be cautious of insurance sales disguised as mandatory workplace legal training briefings and false advertising using unauthorized insurance guide materials.

Insurance briefing sales refer to a sales method where insurance agents use workplace mandatory legal training sessions or seminars to introduce products and solicit group subscriptions.

Since product explanations are usually given in a relatively short time, such as after training or during breaks, there is a concern that consumers may not fully understand the product details, leading to potential mis-selling.

The FSS emphasized that when purchasing insurance, consumers should not rely solely on the agent’s explanation but must verify key details such as product name and coverage through the product description document before making a decision.

They added that special caution is needed as there are many cases of mis-selling where whole life insurance with high business expenses is mistaken for a savings product.

Additionally, when purchasing insurance, consumers must verify whether the insurance guide materials (subscription plan, product summary, etc.) have been approved by the insurance company (checking for management number notation).

In case of suspicion of unauthorized guide materials, consumers should contact the insurance company’s call center or take photos of the guide materials along with the agent’s business card to keep as proof.

It was pointed out that if the acquisition date or source of unauthorized guide materials is unknown, it may be difficult to recognize them as evidence of mis-selling.

The FSS also emphasized that happy calls (complete sales monitoring calls) must be answered according to the consumer’s own intention.

The happy call system is a complete sales verification procedure where, after applying for an insurance contract, the insurer contacts the policyholder by phone or electronically to confirm whether important product details were explained.

Even if the policyholder answers as instructed by the insurance agent, if the answer is confirmed to be the policyholder’s own response, it is difficult to recognize it as mis-selling.

Furthermore, it was clarified that non-lawyer complaint agencies cannot demand money from consumers in exchange for services such as premium refunds.

Mr. D contacted a complaint agency after seeing an online advertisement claiming they could help recover the full amount of premiums paid. The agency demanded an initial fee of 100,000 KRW and, upon successful refund, requested a portion of the refunded premiums as a success fee.

The FSS pointed out that if a complaint agency demands money in exchange for handling complaints such as premium refunds, it may violate the Attorney-at-Law Act.

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