Kyobo Life Insurance: "Lifetime Safe Trust Solves Dementia Money Issue, Popular Among Seniors"

Kyobo Life Insurance announced on October 2 that its "Lifetime Safe Trust," introduced as a solution to the growing social issue of "dementia money" in Korea's rapidly aging society, is receiving a strong response from people in their 60s and 70s.

On September 3, Kyobo Life Insurance launched the Lifetime Safe Trust to prevent the so-called "dementia money" problem, in which the financial accounts of people aged 65 and older with diminished cognitive abilities due to dementia or severe illness are frozen, making it impossible to access their funds. The scale of dementia money in Korea is estimated at about 172 trillion won, equivalent to 6.9% of the country's gross domestic product (GDP).

Dementia money refers to funds that become inaccessible to families during old age, when unexpected expenses such as hospital bills and nursing care costs surge, ultimately resulting in inheritance tax burdens. On a national economic level, reduced cash liquidity leads to sluggish domestic demand and a vicious cycle of social losses, making it a serious social problem. In Japan, which entered a super-aged society 20 years ahead of Korea, the scale of dementia money has reached 240 trillion yen (approximately 2,300 trillion won), accounting for 40% of its GDP.

Kyobo Life Insurance Gwanghwamun Headquarters. Kyobo Life Insurance

The Kyobo Life Insurance Lifetime Safe Trust allows subscribers to use their accounts freely like regular financial accounts under normal circumstances. However, if they are medically diagnosed with severe dementia or a critical illness that makes it difficult to manage daily life independently, a pre-designated guardian takes over management of the trust account.

The 100th contract holder for the Lifetime Safe Trust, a man in his late 60s, said, "After seeing a friend suffer a stroke and his family face great difficulties because they could not withdraw cash from his account, I decided to entrust all my cash to the Safe Trust account to protect the wealth I have accumulated over a lifetime."

Regarding contract status, female subscribers accounted for 76%, significantly higher than male subscribers at 24%. By age group, those in their 70s made up the largest proportion at 51%, followed by those in their 60s (23%), 80s (18%), and 50s (8%).

In terms of contract amounts, "under 100 million won" accounted for 79% of contracts, making up the majority. This was followed by "100 million to less than 500 million won" (17%), "500 million to less than 1 billion won" (3%), and "1 billion won or more" (1%). Contract balances fluctuate dynamically, as deposits and withdrawals can be made at any time.

Since fully entering the comprehensive property trust business in July last year, Kyobo Life Insurance has been providing customized trust services in the insurance industry, such as insurance claim trusts and will substitute trusts.

Kim Gye-wan, head of Kyobo Life Insurance's Comprehensive Asset Management Team, said, "Since the super-aged society has already begun as of last year, financial institutions must take the lead in addressing social issues with a variety of services." He added, "Kyobo Life Insurance will continue to do its best to provide customized comprehensive property trust products to help the elderly overcome the challenges of asset management."

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