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Insurance cancellations soar on economic woes

All Headlines 16:05 April 06, 2016

SEOUL, April 6 (Yonhap) -- Life insurance policyholders canceled contracts worth 18.5 trillion won (US$16 billion) last year, the highest annual figure in recorded history, due to continued financial woes amid a protracted economic slump, a trade association said Wednesday.

The 2015 cancellations mark a jump from 13.8 trillion won in 2002 and 17.2 trillion won in 2014, according to the Korea Life Insurance Association (KLIA).

"For many households, canceling insurance policies is the easiest way to secure cash when the economy is not good. Insurance holders increasingly feel the burden of paying insurance premiums on a monthly basis if their income does not rise enough to offset increases in living expenses and one-off costs, such as higher home rental costs," a KLIA spokesman said.

In a survey on 2,000 households conducted by the KLIA last year, the respondents said 423,000 won seems to be an affordable monthly premium payment, down 13.7 percent from 490,000 won in 2012.

In the non-life insurance front, policy cancellations also soared to 9.9 trillion won from 2.3 trillion won in 2002, the data said.

kyongae.choi@yna.co.kr
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