Dementia insurance cover increasingly sought by Koreans

Insurance policies covering dementia are in demand in Korea, while insurers are offering new and innovative coverage.

According to the National Institute of Dementia, one out of 10 people over 65, or 705,473 people, were found to have dementia in 2018. The number is projected to hit one million in 2024 and reach more than three million by 2050.

As about 6 percent of the total population is expected to have dementia in 2050, more people are looking to purchase insurance policies that cover related expenses. Those afflicted face a heavy financial burden and people around them are also affected. Dementia, among other complications, causes a long-term decrease in the ability to think and remember, requiring those with it to receive a high level of support and care from others for a long period of time.

Korean insurance companies aware of the growing challenge are creating policies and updating existing programs. Many insurers are introducing new products that support nursing fees for those diagnosed with dementia. Some of them are designing their products to insure less severe cases of dementia while extending coverage periods and the amount of coverage.

Hanwha Life introduced a dementia policy in January that covers nursing fees for policyholders until they are 95. The premiums are fixed. Around 110,000 people applied to purchase the policy within two months of release. The initial demand was high, though the premium is expected increase or the coverage to shrink.

Samsung Life introduced a comprehensive nursing policy that covers fees for conditions affecting mobility and quality of life, such as arthritis, stroke and dementia. The policy pays medical fees plus additional expenses and costs if long-term hospitalization is needed. The number of policyholders reached 42,000 by the end of last month, the first month of launch.

Kyobo Life Insurance recently released a product that provides living funds for dementia patients. If diagnosed with a severe case, the policyholder receives a 20 million won ($17,672) lump-sum payout and then 1 million won a month to offset the future financial burden.

Policyholders of Shinhan Life Insurance’s new dementia product are exempt from premium payments when diagnosed with severe dementia. Mirae Asset Life Insurance allows its policyholders to preselect their own agents for claims submission and receive funds more easily when diagnosed with dementia.

Non-life insurance company dementia policies are also popular with consumers. Samsung Fire & Marine Insurance’s new policy provides a varying level of financial support for nursing fees depending on the severity of symptoms. A total of 19,000 were sold in the first month.

Some non-life policies are focused on financially assisting patients upon diagnosis instead of covering nursing fees. KB Insurance’s provides a payout of 50 million won.

A simplified application procedure is offered by some non-life companies. Hyundai Marine & Fire Insurance and DB Insurance accept customers with pre-existing conditions.

Consumers are advised to carefully examine each dementia policy, as some only cover severe cases. Customers are also cautioned to find out whether they are insured for having dementia after the age of 80.

BY HA HYUN-OCK, KO JUN-TAE [ko.juntae@joongang.co.kr]