As the number of patients receiving psychiatric treatment continues to rise, insurance companies are launching products that pay out benefits if a diagnosis of depression is made. In the past, mental illnesses were included in insurance exclusion clauses, but recently, in addition to launching dedicated products, there is a trend to introduce related provisions in long-term care insurance that covers conditions such as dementia.
According to the insurance industry on the 6th, HANWHA GENERAL INSURANCE has developed a diagnosis benefit insurance for mental illnesses and is selling it with exclusive usage rights. The 'Signature Women's Health Insurance 3.0' covers hospitalization costs for eating disorders, diagnostic fees for specific stress-related mental illnesses and diseases, as well as support for specific sleep tests. The exclusive usage rights are a type of 'patent' that grants temporary exclusive sales rights to innovative products by the Korea Life Insurance Association and the General Insurance Association.
Carrot General Insurance is also selling a mental illness treatment insurance called 'Mind Care Module.' This product provides coverage ranging from a minimum of 500,000 won to a maximum of 10 million won, based on the severity of the condition, for those who have received prescriptions for medication for more than 90 days within one year following a diagnosis of depression, schizophrenia, panic disorder, and post-traumatic stress disorder.
Lotte Insurance's 'ALICE Women's Health Insurance' offers provisions that cover costs for treating mental illnesses. Depending on the type of mental illness, it provides coverage ranging from a minimum of 500,000 won to a maximum of 10 million won for those who have received prescriptions for medication for more than 90 days within one year from the date of diagnosis.
Mental illnesses have often been classified as exclusions in insurance policies, resulting in them being excluded from coverage. For example, exclusion clauses in existing long-term care insurance products included cognitive impairment due to alcohol addiction, schizophrenia, and depression.
Moreover, the lack of awareness about coverage for mental illnesses due to social stigma has been a factor in reducing the necessity for the development of insurance that covers mental illnesses. Because mental illnesses are chronic, have a high probability of recurrence, and require long-term treatment, insurance companies may face increased loss ratios (the ratio of claims paid to premiums collected).
However, with recent changes in social perceptions regarding mental illnesses, insurance companies are launching products that partially cover mental illnesses. There is an increasing trend to include coverage for mental illnesses in long-term care insurance, especially since depression frequently occurs at the early stages of dementia.
HANWHA GENERAL INSURANCE's 'Hanwha Dementia Long-Term Care Insurance No Dividend' is a long-term care insurance product but has introduced coverage for illnesses that may occur at the early stage of dementia. It covers specific diagnosis fees for depression following a diagnosis of Alzheimer's disease and specific stress-related mental illness.
The reason insurance companies are developing mental illness insurance products or introducing new provisions is that the number of patients continues to rise. According to statistics from the Health Insurance Review and Assessment Service, as of 2022, the number of patients receiving treatment for depression was 1 million, a roughly 33% increase from 750,000 in 2018. The number of patients with anxiety disorders also increased by 32.3% compared to 2017, with 865,108 patients as of 2021.
An official from an insurance company selling coverage products related to mental illnesses noted, "While the loss ratio for not only mental illnesses but also specific diseases may be high, it does not create operational difficulties when considering product competitiveness in terms of portfolio composition. Taking into account the benefits that customers feel from this product or provision, we judged that the advantages outweigh the disadvantages."