# A 63-year-old housewife who signed up for first-generation real-life insurance in March 2009, recently heard from an insurance company that premiums will rise by nearly 30% at a time from March this year. The insurance premium, which was 9,300 won, has to be paid as much as 138,400 won from March this year.
Including the increase of the husband who signed up with him, the premium that was increased in a month is 60,000 won. The loss insurance premiums that Mr. A and Mrs. A must pay per year are over 3 million won. Mr. A said, “I retire from my job and my income is decreasing, but I am worried about how much more in the future it will increase, the monthly loss insurance premium that I have to pay for every three-year renewal.”
From this year, the premium burden for first-generation loss insurance subscribers is expected to increase further. The insurance industry forecasts that the first-generation loss insurance premiums will rise by 15-17% on average from April. Samsung Fire & Marine Insurance has already predicted a 19% increase above the industry average. First-generation real-life insurance is a real-life insurance product sold until September 2009, with 8.66 million subscribers alone.
When the five-year increase is reflected at once, the’renewal bomb’
According to the insurance industry on the 23rd, the premiums actually paid by first-generation subscribers this year are expected to rise by 50% or more in some cases.
In the case of first-generation indemnity insurance, the renewal period consists of three or five years, because the same premium can be paid during the period and the increase of three or five years can be reflected at a time. Consumers sometimes refer to this as a’premium renewal bomb’ as the premium burden is increasing at once. Insurance premiums for first-generation losses rose 10% in 2019 and 9.9% last year.
The timing of insurance subscription is also a variable for premium increases. Since the premium adjustment period for first-generation indemnity insurance changes as of April 1, there may be a significant difference in the amount of increase in the period between January and March and the rest of the period.
For example, if you signed up in March as in the case of Mr. A, the sum of the three years 2018-2020 will increase by 19.9%. On the other hand, for subscribers after April, 34.9~36.9% of the sum of the three years from 2019 to 2021 will increase. In addition, the higher the elderly, the higher the premium, so the actual premium may be higher. If the renewal period is 5 years, the burden is even greater.
The second generation’s actual loss is also inevitable… Will the 4th generation loss-of-loss subscriptions increase?
In addition to the first generation, second generation (standardized) subscribers are not in a safe situation. Second-generation real-life insurance is a product that was sold and discontinued from October 2009 to March 2017, and its subscribers amount to 19.2 million.
Unlike the first generation, a 10% self-pay was added, but it is still a burdensome product for insurance companies. An official from the insurance industry said, “The loss ratio of the first and second generation real-life insurance (the ratio of insurance premiums to premium income) is constantly rising, so the increase is inevitable.” .
The insurance industry predicts that this year, due to the burden of renewing premiums, there may be a movement to change to the fourth-generation real-life insurance, which is launched in July, mainly for first and second-generation insurance subscribers. Like auto insurance, the fourth-generation real-loss insurance is applied with a premium differential system, and those who receive a lot of medical services pay a high premium, so the insurance premium is cheaper than other real-loss insurance products.
Research Fellow Chung Seong-hee of Insurance Research Institute advised, “It is necessary to determine whether to convert, taking into account the person’s health condition and the tendency to use medical care.”
Jeonghyun Kim reporter [email protected]
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