Health insurance policyholders with no history of hospitalization or surgery will soon find it easier to apply for accident-free discounts. When a policyholder expresses their intent to convert, the insurance company will verify their accident history and apply the most favorable discount terms.
The Financial Supervisory Service announced on October 5 that it has improved the accident-free contract conversion system to be more customer-centric.
This system allows policyholders who have not experienced hospitalization or surgery for a certain period after enrolling in a health insurance plan with this feature to maintain coverage while reducing premiums. Nine non-life insurance companies and nine life insurance companies offer this program. For instance, a man in his 40s enrolled in a simplified insurance plan can receive a 6.5% discount after one year of no accidents and a 45.9% discount after ten years. The discount rates and conditions vary by product.
However, as of the end of May this year, among the 10.81 million contracts with this feature, only 1.16 million contracts, or 17.6%, had applied for discounts after more than one year of enrollment. The Financial Supervisory Service believes that many more contracts meet the actual discount eligibility criteria.
Previously, some insurance companies only provided annual notifications via text message or accepted applications through branch visits or agents. Policyholders had to select their accident-free period and conversion type themselves, which sometimes resulted in receiving a lower discount than they were eligible for.
Moving forward, insurance companies will increase the frequency of notifications and diversify communication methods, including phone and mail. The notifications will specify the premiums before and after the discount and the type of contract. Applications can also be made via mobile or phone, and the process from application to review can be completed using the phone number provided in the notification.
Once a policyholder's intent to convert is confirmed, the insurance company will check the accident history and notification details to apply the most advantageous conversion type. The operational procedures will be improved immediately, and the IT systems and insurance terms will be updated by January next year.
However, discounts will only apply from the date of the conversion application and will not be retroactive. Applications must be submitted within the specified conversion period, and failure to properly disclose any hospitalization or surgery will invalidate the conversion, requiring the return of any discounted premiums.
* This article has been translated by AI.
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