Sales of Whole Life Insurance Decline in South Korea, Allows Death Insurance Benefits
The Korea Times
Seoul – Sales of whole life insurance in South Korea have declined sharply in recent years as policyholders reconsider the value of long-term death benefits amid rising life expectancy and changing financial priorities. In response, financial authorities have introduced reforms to allow policyholders to access their death benefits up to 90% while still alive, aiming to enhance the utility of these products and provide more flexibility for retirement planning.
According to data from the Financial Supervisory Service (FSS), the number of new whole life insurance contracts dropped from 1.65 million in 2020 to 1.06 million in 2024, with the total contract value falling approximately 45 percent from 88.6 trillion won to 49.1 trillion won over the same period.
To address this issue, the Financial Services Commission (FSC) and the FSS announced new measures during an insurance reform meeting attended by over 130 industry stakeholders, including insurance company CEOs and academics. Under the reforms, policyholders will be able to receive their death benefits in the form of monthly annuity payments or use them for services such as health care while still alive. The program is expected to roll out as early as the third quarter of this year.
The FSC highlighted that Korea’s older adult poverty rate stands at 39.2 percent, one of the highest among OECD countries, underscoring the need for improved retirement income solutions.
(Note: The Financial Supervisory Service (FSS) is responsible for the oversight and regulation of institutions that operate in the South Korean Financial Services Industry.)