“Even 100,000 won a month is too much”… Increased number of office workers losing principal and canceling insurance policies

Mr. A, an office worker, recently canceled his insurance. This is because the insurance premium, which costs a little over 100,000 won per month, has become somewhat burdensome. Mr. A signed up for insurance through a friend who is an insurance agent, and his heart is heavy because he heard many words of gratitude.

It has been found that cancellation of insurance contracts, which is one of the indicators of how ordinary people are living, is increasing.

Due to the nature of insurance, if you cancel before maturity, the refund will be significantly less than the premium already paid. Canceling insurance early, even at the cost of losing the principal, can be interpreted as a sign that the situation of the common people is not so good.

According to the latest statistics from the Life Insurance Association on the 7th, the size of insurance contract cancellation refunds from 22 life insurance companies, including the Big 3 such as Samsung Life Insurance, Hanwha Life Insurance, and Kyobo Life Insurance, as of the end of September this year was KRW 34.4557 trillion.

This is an increase of approximately 5 trillion won in cancellation refunds compared to the same period last year.

Looking at the increase in cancellation refunds over the past three months, the size is expanding to 3.5142 trillion won in July, 3.5761 trillion won in August, and 3.636 trillion won in September.

The number of contracts that have become invalid due to failure to pay premiums for more than two months is increasing. As of the end of September this year, refunds due to this loss of effect amounted to 1.2125 trillion won, an increase of approximately 77 billion won compared to the same period last year. The average for the past three months (July to September) also significantly exceeded 100 billion won per month.

If an insurance contract is canceled early, blind spots in coverage occur and various losses such as loss of principal occur, the insurance industry recommends using various systems to maintain the contract if there are temporary difficulties.

These include insurance contract (terms) loan, interim loan, temporary suspension (postponement) of premium payment, automatic premium loan payment, premium reduction, full payment of premium reduction, and extended term system (applicable to whole life insurance).

For example, the temporary suspension of insurance premium payment is a system that maintains the insurance contract without paying the insurance premium for a certain period of time, and the risk insurance premium and business expenses necessary for maintaining the contract are deducted from the cancellation refund.

However, you must be careful as the insurance contract may be automatically canceled if the cancellation refund is insufficient to cover the amount.