Hanwha Life Insurance, Korea’s oldest life insurer, has launched a new life insurance program, called “The Warmhearted & Free Pension Insurance,” which provides greater flexibility in terms of premium payments.
The pension insurance program acquired the exclusive use right lasting three months from the Korea Life Insurance Association in September 2014. As a result, the company obtained a total of 11 exclusive use rights from the association, the largest number for any domestic life insurer. Of note, the company owns more exclusive use rights (eight) in the pension insurance segment than other domestic life insurers. “We believe that this result will make a great contribution to enhancing Hanwha’s reputation in the development of distinctive insurance products, especially retirement programs,” said Choi Sung-gyun, the head of Products Development Department at Hanwha Life Insurance, on September 18.
The Warmhearted & Free Pension Insurance is the first insurance policy which provides greater flexibility in terms of premium payment, a major factor behind Hanwha’s gaining of exclusive rights from the Korea Life Insurance Association. The insured will fix the maximum premiums that they want to pay every year. Thereafter, they will be free to pay premiums anytime within the year, when one year has passed after they joined the pension insurance.
Since the insured will pay the pre-set annual contributions within the year, they will be able to receive stable financial benefits following or disability. The new insurance will especially be beneficial to self-employed persons and non-regular workers whose incomes will vary.
The salient feature of the new insurance coverage is that it can be accessible to persons with a history of diseases and who are advanced in age, as the unnecessary death guarantee was removed. It is also effective in maximizing pension resources since the insured do not need to pay unnecessary premiums on death guarantee. Persons aged between 30 and 74 can sign up for the new insurance. Insurance money will be paid for policyholders who are aged 90 and under, about 10 years longer than the conventional retirement plans.
As the elderly will gain greater access to the pension coverage, guarantee for long-term care (LTC) benefits has been reinforced. The aged, who join to the LTC-type Warmhearted & Free Pension Insurance, will see their insurance money double in case they are diagnosed as those who are unable to perform their basic activities of daily living and a serious type of Alzheimer's disease.
Payments of premium can also be waived for those who subscribe to the LTC-type specialty payment exemption plan. Of note, under the existing LTC-type pension insurance programs, the pension amount can be mitigated in line with the variables of the risk rate. However, the Warmhearted & Free Pension Insurance will not be exposed to such a risk, said Choi, head of the Products Development Department.
Choi said that the “Warmhearted & Free Pension Insurance is an insurance coverage that will assure policyholders of stable annuity despite irregularities of income, thanks to the extended payment flexibility.” “Another advantage is that options for customers have multiplied as senior citizens as well as sick persons can get benefits from the innovative insurance policy,” he added.
“Taking advantage of our capability demonstrated in the development of the “Warm-hearted & Free Pension Insurance,” Choi said, “Hanwha Life Insurance will accelerate its efforts to develop new innovative insurance products that fully meet the changing needs of customers.” The basic monthly premium is 100,000 won. Persons between 30 and 70 can join the insurance policy. Insurance money will be paid back to the insured aged between 45 and 90. Hanwha Life Insurance is Korea’s second largest life insurance company.
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