An office worker in his 30s, identified as A, recently signed up through a general agency (GA) for a policy with a monthly premium in the 50,000-won range that provides a 3 million won death benefit and a 20 million won cancer diagnosis benefit. In the process, A was shown similar products from other insurers: one in the 80,000-won range that added a special rider for major cancer treatment costs, and another with a monthly premium of 1,420 won that covered only a 1 million won cancer diagnosis benefit. A said the scale of coverage and the premium gaps were so large that it was effectively difficult to compare.
Criticism is mounting that the "insurance product comparison and explanation" system provided to consumers during enrollment is ineffective. It was introduced to help consumers make rational choices, but in practice, there are many cases where products with significantly different coverage and premiums are presented as similar, which can cloud consumers' judgment. The financial authorities and the industry are preparing measures to improve the system's effectiveness.
According to the insurance industry on the 21st, the financial authorities have, since Apr. 2017, required GAs selling insurance products to compare and explain three or more products of the same or similar type from different insurers before selling to consumers under the "insurance product comparison and explanation system." The aim is to help consumers choose more rationally. The products to be compared are not chosen arbitrarily by planners but are automatically selected based on product classification information that insurers have registered with the Credit Information Center.
However, in actual comparison documents, there are often cases where the coverage structure and premiums between the product a consumer intends to buy and the comparison targets differ significantly, making it hard for consumers to decide. As in A's case, products may be presented with riders unrelated to the contract added or with key coverage riders missing, leading to large premium gaps.
This phenomenon largely stems from the nature of insurance products. Insurers differ in how they design the main contract and riders. For example, in health insurance offered by life insurers, death coverage is often the main contract, with cancer diagnosis benefits included as riders. But because the current comparison system classifies similar products based on the main contract, there are many cases where only the death coverage is similar and such products are presented as comparison targets. In this process, cancer-related riders may be omitted or different riders added, widening premium differences.
As a result, some say the insurance product comparison and explanation system is failing to deliver. An industry official said, "If the product classification criteria do not properly reflect actual enrollment designs, the comparison and explanation system can instead increase consumer confusion," adding, "Only by comparing products that reflect actual enrollment designs and conditions as much as possible can the system's effectiveness be improved."
Supervisory authorities also acknowledge the system's limits. An official at the Financial Supervisory Service said, "Unlike products such as auto insurance where coverage is standardized, protection-type insurance has structures that vary by company, making uniform comparison difficult," adding, "If the criteria are narrowed too much, the comparison targets disappear, and if they are broadened, similarity declines." The official added, "Following a recent system overhaul, we are continuously adjusting the comparison criteria to reflect industry feedback."
The GA sector is also exploring improvements. An official at the GA Association said, "Currently, comparisons are centered on representative products and representative ages, which creates differences from actual designs," adding, "We are improving the system to reflect subscribers' ages and conditions more precisely."