Korean Job Discussion Forums

biscuit · Joined: 07 Dec 2005 Location: Pusan

I've just had an AIG guy over to talk about life insurance and it seems that in Korea I can only get term insurance to 65 with no conversion or renewal features. I would really like to be able to do something with my policy when I get older rather than just losing all the money that I've paid into it. Conversion ability and non-medical exam renewal features are common elsewhere. I was wondering if anyone knew of an organization in Korea that sold insurance like that? Or is it all the same here?

4 months left · Joined: 07 Feb 2003

Sounds fishy, you should be able to get 10 or 20 year term insurance. Term insurance is the only thing you need, NEVER use Life Insurance as an investment vehicle. You should have term insurance when your kids are young. When they finish school you should have enough to cover any bills and funeral costs. You need less as you grow older.

If you don't have kids, you should have insurance to cover any debt.

The guy is probably lying, insurance salespeople get paid by commission and the bigger the package, the bigger the commission.

chiaa · Joined: 23 Aug 2003

The wife and I looked into this after getting some insurance on the store. While the store insurance was very reasonable, the life insurance was not. Much much cheaper for me to get it back in the states. It was really scammy here.

biscuit · Joined: 07 Dec 2005 Location: Pusan

Oops, sorry, I guess I wasn't very clear. I mean that to age 65 is the maximum insurance that I can get. I can get terms of 5,10, 20 years and to age 65 is the maximum amount. And after it expires that's it. It's all gone. There's no possibility of renewal or conversion to a different plan of any sort. That's what I'm not happy about. In Canada I have other options available but there seems to be not too much choice here. I'm going to check out ING tomorrow and hopefully they'll have something better but I kinda doubt it. I would like the option of converting to another plan after 65 instead of just spending all that money for nothing. If I happen to still be alive, that is.

biscuit · Joined: 07 Dec 2005 Location: Pusan

Actually the price seemed pretty reasonable. It was about 40,000 won a month for a 38 year old female smoker for 100,000,000 coverage. Of course without any conversion feature maybe it's not such a good deal after all...

merrilee · Joined: 13 May 2003 Location: South Korea

The purpose of life insurance is to a) pay for your funeral expenses, and b) provide your family with lost income. It's not meant to provide a "reward" for those left behind.

Do you plan to still be working at 65? If not, then there's no lost income for which you need life insurance to make up for. Save now and have a lump sum of money that you pass on to your family when you die.

As for funeral expenses, hopefully by the time you're 65 you can save up whatever that amount is in Korea.

Whoever got you to believe that you need to get something back from your life insurance "investment" is probably a rich man who scams people for a living. If you do the math on those "investment" life insurance policies, you will see that you are FAR better off investing on your own elsewhere.

shifty · Joined: 21 Jun 2004

A conversion option is an option to extend the life cover free of medical evidence. It isn't for free and its value relates only to insurability in terms of your health.

Importantly, if you ever decide to exercise the option, the rate used will be determined by your then age, ie will be more expensive.

It could be that the agent is guiding you to select a long term, like to age 65. Commission is based on term, the longer the term the more the comm. So the premium rate will be considerably beefed up by the higher commission of the agent and his myriad bosses. But also by the term extending into an exponentially higher risk age group.

As a previous poster pointed out, don't invest via life assurance, buy term insurance only and save using a normal savings vehicle.

biscuit · Joined: 07 Dec 2005 Location: Pusan

Thanks for all the advice...It does make a lot of sense to chose a shorter term right now I guess. The 5 and 10 year term rates are the same. The 20 year and to 65 terms are about double that.
Life insurance seems to be a much better deal for women here than men. My husbands insurance premium would be about 3x mine and he's 9 years younger than me. He should be a really low risk being so young you'd think. Kinda strange.

shifty · Joined: 21 Jun 2004

If your husband is 9 years younger than you he'll definitely rate a lower premium than you, all things being equal. I mean, he's not a big-game hunter, is he?. Or a stuntsman?

It's that he has a completely different product than the one you are considering and could have included disability benefits, chronic disease protection and hospital stays.

There's a whole array of add-on benefits , that might account for the variance in premiums, apart from the basic contract, which perhaps has a savings element..

biscuit · Joined: 07 Dec 2005 Location: Pusan

shifty, actually it's for exactly the same plan, no extra riders or savings elements or anything, purely life insurance. We both have the same job. He's 29 and it would cost almost 120,000 a month for 200,000,000 coverage for death only. That seems really expensive. I'm going to check out ING, I think AIG is way too expensive, for him anyway. His premium is not 3x mine, I screwed up there... For me 200,000,000 coverage would cost 72,000 per month. (This is for coverage to 65- the only numbers that I got). I just think that his insurance is still way too expensive. He's only 29. He's probably got a good 50 years left anyway. Hopefully...

shifty · Joined: 21 Jun 2004

Well, that is a puzzle. It seems that rates for identical term insurance can differ quite widely.

Judging from yr first post you've a philosophical bent for life assurance, as opposed to insurance. Why don't you request a quotation for enhanced whole of life assurance.

It's composed of two parts. A growing with profit base and two, decreasing term insurance. As the one increases, the second decreases.
The total amounting to high cover for a low premium.

This way you obviate the need for a conversion option and you can later surrender the policy and get all of yr money back. Or naturally keep it until ah death. The proceeds then will be vastly more than total paid.

Life companies prefer that kind of permanent business and accordingly grant lower tariffs, I'm guessing. No harm in getting some figures. Get the surrender value at age 65, don't forget.