The Financial Services Commission and the insurance industry said on the 31st they will implement a "three-part package to overcome low birthrates" starting in April to ease the financial burden on households with childbirth and child care. The plan follows operating measures unveiled at a meeting of insurance company CEOs chaired by the Financial Services Commission chair in Oct. last year, with all insurers participating.
Those eligible are policyholders themselves or spouses within one year after childbirth; those on parental leave; or those using reduced working hours for child care to raise children age 12 or younger (6th grade in elementary school). The measures apply retroactively to products or policy loans signed before implementation, and the three support measures can be used concurrently.
First, premiums for child protection insurance will be discounted. During parental leave or reduced working hours, discounts are available without limits on the number of children, and in the case of childbirth, when a sibling is born, the premium for the existing child's policy is reduced. Discount rates vary by insurer but are generally in the 1–5% range, and the discount period is one year.
In addition, premium payments for all protection-type life and health insurance will be deferred for six months or one year. Even if reduced income makes premium payments difficult, coverage remains intact during the deferral period, and no separate interest is charged due to the deferral. Deferred premiums can be paid in installments over the same length of time after the deferral period ends.
At the same time, repayment of interest on policy loans will also be deferred. For all policy loans held by the policyholder or spouse, repayment of interest can be postponed for up to one year. Likewise, no additional interest accrues on the interest during the deferral period.
Applications can be made at each insurer's in-person customer center or branch. After reviewing supporting documents, benefits apply starting from the next premium or interest payment. The insurance industry estimates the measures will reduce consumer burdens by about 120 billion won per year. The government and the insurance industry plan to operate the system on an ongoing basis rather than as a one-off, strengthening support for people's livelihoods.