Business · Companies · 1 hr ago
Insurance payouts rise as unpaid-premium notices fail to reach policyholders
In South Korea, insurance payouts on contracts with undelivered payment notices rose 83.8% from 2021 to 2025.
Insurers send payment reminders when customers fall behind, and the rules are meant to protect people from losing cover by mistake.
But if a reminder does not reach the customer, the insurer cannot cancel the contract.
One fire insurance customer missed 23 months of payments, then paid the 460,000 won owed after a fire and received 100 million won in insurance money.
The case shows how customers may keep cover despite long periods without paying, and videos online have shared ways to exploit the rules.
Of about 220 million reminders sent from 2021 through the first half of 2026, only 23.2% reached customers; the rate was 21.8% in the first half of 2026.
A lawmaker urged the financial regulator to investigate long-term unpaid contracts and improve how reminders are delivered, while protecting customers who miss payments by accident.
Insurance payouts on contracts with unpaid-premium notices that did not reach policyholders rose 83.8% from 2021 to 2025, according to data analyzed by lawmaker Song Eon-seok.
The payouts increased from 1,318 billion won in 2021 to 2,423 billion won in 2025.
From 2021 through the first half of 2026, insurers paid 1.0724 trillion won across 935,456 claims on contracts where notices did not reach policyholders.
A fire-insurance customer who had missed premiums for 23 months paid 460,000 won after a fire and received 100 million won in insurance money.
Song called for an investigation into long-term arrears and notices that fail to reach policyholders, and for stronger oversight to prevent abuse.
- Who
- Insurance policyholders with unpaid premiums, insurers and lawmaker Song Eon-seok are involved.
- What
- Insurance payouts on contracts where premium-demand notices did not reach policyholders increased, amid reports that some customers pay overdue premiums after an accident and claim benefits.
- When
- Payouts rose from 2021 to 2025. The figures also cover the first half of 2026.
- Where
- South Korea.
- Why
- Insurers cannot cancel a contract when the required notice does not reach the policyholder, and the article says some people exploit this rule.
This story does not have two clearly opposing sides.
Insurers paid 1,318 billion won on contracts where premium-demand notices did not reach policyholders.
Payouts on those contracts reached 2,423 billion won, up 83.8% from 2021.
Insurers paid 987 billion won across 90,680 claims on contracts where notices did not reach policyholders.
- Payout increase
- 83.8% from 2021 to 2025
- 2025 payouts
- 2,423 billion won
- Cumulative payouts
- 1.0724 trillion won from 2021 through the first half of 2026
- Cumulative claims
- 935,456 from 2021 through the first half of 2026
- Notice delivery rate
- 23.2% of about 220 million notices reached policyholders from 2021 through the first half of 2026
What people are saying
A system designed to protect policyholders must not turn into a way to dodge premium payments while keeping coverage.
The Financial Supervisory Service should conduct a full investigation into long-term arrears and contracts where notices do not reach policyholders, and improve the effectiveness of premium-demand notices.