Insurance products for the handicapped

Insurance products exclusively for the handicapped that give tax privileges will be introduced starting next year.

The Financial Supervisory Commission has decided to finally confirm the plan to introduce insurance products exclusively for the handicapped, which have been a long-cherished desire of the handicapped, at the Millennium Democratic Party discussions to be held on August 21.

The Millennium Democratic Party plans to amend the Income Tax Legislations and related laws during the ordinary session of the National Assembly this fall, as soon as the introduction of an insurance product exclusively for the handicapped is decided upon, and plans to make it possible for this product to be sold to the handicapped.

Although the demand for the introduction of insurance products exclusively for the handicapped had been demanded by the Korea Association of the Disabled until now, insurance companies have been avoiding product sales with the reasons that there are no benefits for the contractor and there is a high danger probability.

It is expected that the insurance product exclusively for the handicapped that will be introduced anew will reduce the economic burden of the handicapped by applying the deductions from income benefits being provided to ordinary contractors.

At present, in the case of ordinary insurance contractors, a 700,000 won per year insurances have been provided to guarantee-type insurance subscribers, and income tax deduction benefits of up to 720,000 won (within the 40% range of payment amount) per year have been provided.

It is forecast that the insurance industry will actively work on the sales of insurance products for the handicapped, although their profit ratio is lower than ordinary insurance products, on the levels of niche market capture and public profit business.

Choi Young-Hae moneychoi@donga.com