Beyond Death Benefits to Treatment and Retirement... Life Insurance's "Safety Net" Expands in the Era of 100-Year Lifespans

Demand grows for coverage as South Korea enters a super-aged society

Products diversify from pensions to dementia care, caregiving, and disease treatment

Prevention and asset management strengthen the safety net for later life

The role of life insurers is changing in South Korea, which has entered a super-aged society. This reflects the growing diversity of older adults' needs as they prepare for later life, from securing retirement income to preventing and treating illness, managing dementia and caregiving, and managing assets. In response, life insurers are strengthening pension insurance, health and caregiving coverage, and trust services to broaden the financial safety net for older adults.

According to the Ministry of Data and Statistics' "2026 Statistics on the Aged," people aged 65 and older will account for 21.6% of the population this year, and that share is projected to exceed 40% by 2050. As of 2024, the life expectancy of a 65-year-old was 21.7 years. This means that a person aged 65 could be expected to live to about 86.7.

As retirement lasts longer, the living expenses people need to prepare for are also increasing. According to the 10th supplementary survey of the "2024 National Retirement Security Panel Survey" by the National Pension Research Institute, adults aged 50 and older estimated that the minimum monthly living expenses for a retired couple would be 2,166,000 won, while the appropriate amount would be 2,981,000 won.

However, the combined average monthly pension received by couples who both receive the National Pension is around 1.2 million won, just 55.4% of the minimum living expenses. Since it is difficult to cover retirement living expenses with public pensions alone, the need is growing to secure a stable source of income after retirement while also preparing for unexpected medical and caregiving costs. In this situation, insurance products can help fill income gaps after retirement and ease the household burden of high medical expenses. Life insurers are taking note and diversifying products such as pension and health insurance. One notable product designed to supplement retirement income is KB Life's "KB 100-Year Secure Pension Insurance."

Yun Jeongseon, a professor of business administration at Kookmin University, said, "Although people are spending more time in retirement as society rapidly ages, the National Pension and occupational pensions alone have limitations in addressing income gaps immediately after retirement, changes in spending over the course of life, and unexpected needs for large sums of money. Older adults' assets are also often tied up in forms that are difficult to convert into cash immediately, such as real estate and insurance. It has therefore become important not only to consider how much retirement savings to accumulate, but also when and how much to withdraw."

Yun added, "Recent changes to products, such as allowing policyholders to receive accumulated funds in installments like an annuity or withdraw them early, defer the start of payments when needed, or convert a death benefit into an annuity while still alive, are significant because they broaden the options available for covering living expenses after retirement."

Older adults face a greater burden from medical expenses, and chronic illnesses often require long-term treatment and management even after diagnosis. According to the Korea Disease Control and Prevention Agency, medical expenses for chronic diseases reached 90 trillion won in 2024, accounting for 80.3% of total medical expenses. That year, average annual medical expenses per person aged 65 and older were 5.51 million won, 2.4 times the average of 2.26 million won for the population as a whole.

In response, life insurers are making coverage more specialized, taking into account not only payouts upon diagnosis but also health management, the actual course of treatment, and medical expenses in old age. Samsung Life introduced "Samsung Family Representative Health Insurance Plus+," which pays benefits based on the number of treatments, and "Samsung Pack Health Insurance Care+," which combines coverage with health-management rewards. Kyobo Life added coverage for inpatient treatment in a stroke intensive care unit to "Kyobo My Plan Health Insurance II" and strengthened its coverage structure so that protection against the three major diseases can continue into old age. Shinhan Life's "Balance Fit Plus," which combines death benefits with treatment costs for the three major diseases and an annuity-conversion feature, also focuses on helping customers prepare for both illness and retirement income.

If income falls or stops after retirement and a person is also diagnosed with dementia, the burden of medical and caregiving expenses grows even heavier. In particular, caregiving costs can continue for a long time, making them a drain on retirement savings. According to the Financial Supervisory Service, private caregiving expenses rose from 3.6 trillion won in 2008 to 8 trillion won in 2018, and were estimated to have reached 11.4 trillion won in 2024. Caregiving costs are also rising. In August 2026, the caregiving assistant fee index stood at 145.36, up 45.4% from the 2020 base year.

One product designed to ease the soaring burden of caregiving costs is NH NongHyup Life's "NH All Wonderful Caregiving and Nursing Insurance." Hanwha Life's "Hanwha Life Dementia Care Plus Insurance" is designed with the costs of the full process in mind, from early-stage dementia through testing, treatment, and caregiving. Both products go beyond simply paying a benefit upon a dementia diagnosis and also help ease the caregiving burden that may follow.

However, some say that stronger oversight to prevent mis-selling must accompany the expanded role of life insurers if it is to benefit consumers. Lee Juyeol, a professor in the Department of Health Administration at Namseoul University, said, "Comparative disclosures across products should be strengthened, and information on how annuity payments are calculated, the possibility of interest-rate changes, and early termination terms should be presented in a standardized format. In particular, consumer groups should help check whether disclosure requirements are being effectively met so that older adults can fully understand complex product structures before signing up."

This content was produced with the assistance of AI translation services.