'Language barrier' bars expats from buying life insurance

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'Language barrier' bars expats from buying life insurance


Foreigners still required to understand terms and conditions in Korean

By Park Jae-hyuk

The language barrier still remains as one of the major stumbling blocks for foreigners wanting to sign up for insurance policies here despite a steady rise in foreign residents.

According to a survey by The Korea Times published Tuesday, m
any domestic and foreign life insurance companies are still reluctant to offer foreign language services for expats seeking insurance plans out of concerns over mis-selling claims or due to their ignorance of the potential of a newly-emerging market.

Despite growing demand for life insurance among expatriates in Korea, insurers have demanded that they understand contract terms and conditions only in Korean, if they want to sign up for policies.

Although some life insurers offer counselling services in foreign languages in order to minimize the mis-selling of insurance to foreigners, such services are merely "after-sales services," targeting those who have already subscribed to their life insurance policies.

Kyobo Life, which started offering a counseling service in foreign languages from September, said the new service is intended for those who have already signed contracts with the company.

Kyobo said it has 32,000 foreign policy holders, and has been signing 800 new contracts a month on average.

The insurer said in a Sept. 5 press release that it decided to offer counseling services in foreign languages and distribute brochures written in English and Chinese, due to complaints from the foreign policyholders.

Kyobo Life spokesman Lee Kwon-hee said, however, "Foreigners who want to subscribe to new life insurance policies are still required to understand contract terms in Korean," adding, "As far as I know, other insurers also demand foreign subscribers understand Korean."

Including Kyobo Lifeplanet Life Insurance, an internet-only life insurer unit of Kyobo Life, such companies as AIA Korea, Hanwha Life, DGB Life Insurance, Chubb Life Insurance Korea and Lina Korea wrote on their frequently asked question (FAQ) pages that only foreign residents proficient enough in Korean to understand contract terms and conditions are able to sign up for insurance.

Insurers said proficiency in Korean was necessary for them to prevent the misunderstanding of contracts.

"Given that life insurance ensures money upon illness or accidents, life insurance contracts include difficult legal and medical jargon," Hanwha Life spokeswoman Park Hye-jin wrote on the company's official website.

"It is difficult to fully translate those terms into a certain country's language, so proficiency in Korean is necessary for an accurate insurance contract."

Nevertheless, there are a few life insurers that do not demand foreign subscribers have proficiency in Korean.

According to the Korea Life Insurance Association (KLIA), each company can make its own decision on requirements for policyholders.

"There is no law that regulates requirements for foreign life insurance policyholders," KLIA spokesman Cho Jeong-woo said.

Heungkuk Life Insurance wrote on its FAQ page that foreign residents can subscribe to insurance "if they are able to communicate in Korean or English."

ABL Life Insurance, which wrote on its FAQ page that "foreigners who can understand contract terms" can subscribe to insurance, also said they can sign contracts without proficiency in Korean.

"Although our insurance clauses are written in Korean, foreigners without proficiency in Korean are also able to subscribe to insurance, if they understand the clauses after listening to an explanation in their native language or English," ABL Life Insurance spokeswoman Park Hyun-jin said.

"Proficiency in Korean does not matter, because foreigners fluent in Korean may not be able to hold insurance policies, unless they understand contract terms."

She added her company's "Happy Call service," which was launched in March to offer counseling in English and Chinese, is intended for those who already subscribe to insurance, not for those who considering signing new contracts.

Underestimating market potential

Experts said the nation's life insurers are seemingly underestimating the potential of the life insurance market for foreign residents here.

"If insurers put an emphasis on foreign customers, they must come up with insurance clauses written in foreign languages," said Korea Insurance Research Institute (KIRI) Vice President Lee Tae-yeol, who urged insurers in his May report to target foreign residents here to boost their performance amid market saturation.

According to the Financial Supervisory Service, the nation's life insurers collectively posted a 2.12 trillion won ($1.7 billion) net profit in the first half of 2019, down 32.4 percent from 3.14 trillion won a year earlier.

Against this backdrop, foreigners have emerged as a new income source for insurers, as their demand for life insurance has continued to grow, following the increasing influx.

According to the Korea Insurance Development Institute (KIDI), the number of foreign life insurance policyholders reached 261,000 as of the end of 2018.

This is in part due to an annual growth rate of 8.9 percent on average over the past five years ― higher than the annual growth rate of the number of foreign residents, which was 3.4 percent.

In 2012, KIDI recommended insurers translate important parts of guidebooks and clauses into widely used languages such as English, in order for foreigners to better understand insurance products and avoid possible disputes.

But most insurers still demand foreign customers know Korean, and foreign residents' insurance subscription rate has stood far below Koreans'.

According to KIDI, the subscription rate for foreign men was 17.6 percent in 2018, while that of Korean men was 60.7 percent.

As for women, 25.4 percent of foreign women held life insurance policies, while 63.5 percent of Korean women did.



Foreigners still required to understand terms and conditions in Korean

By Park Jae-hyuk

The language barrier still remains as one of the major stumbling blocks for foreigners wanting to sign up for insurance policies here despite a steady rise in foreign residents.

According to a survey by The Korea Times published Tuesday, m
any domestic and foreign life insurance companies are still reluctant to offer foreign language services for expats seeking insurance plans out of concerns over mis-selling claims or due to their ignorance of the potential of a newly-emerging market.

Despite growing demand for life insurance among expatriates in Korea, insurers have demanded that they understand contract terms and conditions only in Korean, if they want to sign up for policies.

Although some life insurers offer counselling services in foreign languages in order to minimize the mis-selling of insurance to foreigners, such services are merely "after-sales services," targeting those who have already subscribed to their life insurance policies.

Kyobo Life, which started offering a counseling service in foreign languages from September, said the new service is intended for those who have already signed contracts with the company.

Kyobo said it has 32,000 foreign policy holders, and has been signing 800 new contracts a month on average.

The insurer said in a Sept. 5 press release that it decided to offer counseling services in foreign languages and distribute brochures written in English and Chinese, due to complaints from the foreign policyholders.

Kyobo Life spokesman Lee Kwon-hee said, however, "Foreigners who want to subscribe to new life insurance policies are still required to understand contract terms in Korean," adding, "As far as I know, other insurers also demand foreign subscribers understand Korean."

Including Kyobo Lifeplanet Life Insurance, an internet-only life insurer unit of Kyobo Life, such companies as AIA Korea, Hanwha Life, DGB Life Insurance, Chubb Life Insurance Korea and Lina Korea wrote on their frequently asked question (FAQ) pages that only foreign residents proficient enough in Korean to understand contract terms and conditions are able to sign up for insurance.

Insurers said proficiency in Korean was necessary for them to prevent the misunderstanding of contracts.

"Given that life insurance ensures money upon illness or accidents, life insurance contracts include difficult legal and medical jargon," Hanwha Life spokeswoman Park Hye-jin wrote on the company's official website.

"It is difficult to fully translate those terms into a certain country's language, so proficiency in Korean is necessary for an accurate insurance contract."

Nevertheless, there are a few life insurers that do not demand foreign subscribers have proficiency in Korean.

According to the Korea Life Insurance Association (KLIA), each company can make its own decision on requirements for policyholders.

"There is no law that regulates requirements for foreign life insurance policyholders," KLIA spokesman Cho Jeong-woo said.

Heungkuk Life Insurance wrote on its FAQ page that foreign residents can subscribe to insurance "if they are able to communicate in Korean or English."

ABL Life Insurance, which wrote on its FAQ page that "foreigners who can understand contract terms" can subscribe to insurance, also said they can sign contracts without proficiency in Korean.

"Although our insurance clauses are written in Korean, foreigners without proficiency in Korean are also able to subscribe to insurance, if they understand the clauses after listening to an explanation in their native language or English," ABL Life Insurance spokeswoman Park Hyun-jin said.

"Proficiency in Korean does not matter, because foreigners fluent in Korean may not be able to hold insurance policies, unless they understand contract terms."

She added her company's "Happy Call service," which was launched in March to offer counseling in English and Chinese, is intended for those who already subscribe to insurance, not for those who considering signing new contracts.

Underestimating market potential

Experts said the nation's life insurers are seemingly underestimating the potential of the life insurance market for foreign residents here.

"If insurers put an emphasis on foreign customers, they must come up with insurance clauses written in foreign languages," said Korea Insurance Research Institute (KIRI) Vice President Lee Tae-yeol, who urged insurers in his May report to target foreign residents here to boost their performance amid market saturation.

According to the Financial Supervisory Service, the nation's life insurers collectively posted a 2.12 trillion won ($1.7 billion) net profit in the first half of 2019, down 32.4 percent from 3.14 trillion won a year earlier.

Against this backdrop, foreigners have emerged as a new income source for insurers, as their demand for life insurance has continued to grow, following the increasing influx.

According to the Korea Insurance Development Institute (KIDI), the number of foreign life insurance policyholders reached 261,000 as of the end of 2018.

This is in part due to an annual growth rate of 8.9 percent on average over the past five years ― higher than the annual growth rate of the number of foreign residents, which was 3.4 percent.

In 2012, KIDI recommended insurers translate important parts of guidebooks and clauses into widely used languages such as English, in order for foreigners to better understand insurance products and avoid possible disputes.

But most insurers still demand foreign customers know Korean, and foreign residents' insurance subscription rate has stood far below Koreans'.

According to KIDI, the subscription rate for foreign men was 17.6 percent in 2018, while that of Korean men was 60.7 percent.

As for women, 25.4 percent of foreign women held life insurance policies, while 63.5 percent of Korean women did.




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