4th Generation Real Loss Insurance Premium 50% Discount Extended Until Year-End

Withdrawal Possible Even After Conversion

The insurance industry will extend the 50% premium discount benefit for switching to the 4th generation indemnity health insurance until the end of this year.

The Life Insurance Association and the General Insurance Association announced on the 20th that they have decided to extend this benefit.

Indemnity insurance is classified into 1st generation (old indemnity), 2nd generation (standardized indemnity), 3rd generation (new indemnity), 4th generation, and others (senior, pre-existing conditions) based on the sales period and coverage structure. The 4th generation indemnity insurance has a higher deductible compared to previous generations but offers relatively lower premiums.

Previously, the insurance industry provided a special contract conversion discount benefit of 50% off the 4th generation indemnity insurance premium for one year to policyholders who switched from the existing 1st, 2nd, or 3rd generation indemnity insurance to the 4th generation indemnity insurance from January last year to June this year.

The industry is promoting the switch to the 4th generation indemnity insurance, which has a relatively low loss ratio and less concern about insurance fraud. As of last year, the loss ratio, which is the ratio of claims paid to premiums received, was lowest for the 4th generation at 91.5%, followed by the 2nd generation at 93.2%, the 1st generation at 113.2%, and the 3rd generation at 118.7%. However, the share of the 4th generation indemnity insurance was only 5.8% as of last year.

Switching to the 4th generation is relatively advantageous for those who find premium increases burdensome when renewing insurance contracts. Once an insurance policy is canceled, it cannot be reinstated, but a converted policy can be reversed. However, to withdraw the contract conversion, the policyholder must notify the insurance company of their intention to cancel within six months after the conversion. Additionally, if the withdrawal request is made after three months from the conversion date, it can only be applied to contracts for which no claims have been made since the conversion.

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