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By Yi Whan-woo
Low financial returns of insurance products in the long term as well as increased tendency to remain single and live alone are resulting in a reduction in the number of insurance subscribers among young people, particularly those in their 40s or younger.
According to the latest Korea Insurance Research Institute (KIRI) report, the number of new insurance subscribers in their 40s shrank by 3.3 percent and those in their 30s by 7.2 percent between 2010 and 2019.
"The result shows the people who are presumably a part of the most active workforce are turning away from insurance," the study assessed.
Regarding those in their 40s, the KIRI analysis cited the low financial returns due to low interest rates as a reason for not joining saving insurance plans and instead looking for more profitable financial products.
A salary worker surnamed Cho said it was more urgent for him to deal with pressing financial tasks, such as paying monthly rent, rather than saving in the long term through monthly insurance payments.
"I'd rather invest in real estate than insurance because the latter is not so lucrative and even takes too much time to see any benefit," he said.
For those in their 20s and 30s, KIRI viewed many of them as tending to remain unmarried, meaning they have no need to spend money on giving birth, raising children and purchasing related insurance products.
Statistics Korea data showed 42.5 percent of 30-somethings remained unmarried in 2020, up 6.2 percentage points from 36.3 percent in 2015.
It was the first time the age group surpassed 40 percent, resulting in the country's record-low marriage rate.
By gender, 50.8 percent of men in their 30s remained unmarried, while single women accounted for 33.6 percent.
The low marriage rate accordingly resulted in a low fertility rate, with the average number of children a woman bears in her lifetime hitting a record low of 0.84.
The figure is much lower than the replacement level of 2.1 that would keep the country's population stable at 51 million.
"The only insurance I have joined is non-life insurance in case I get seriously hurt and coverage is not possible through government-run health insurance," a salary worker surnamed Shin said. "All my friends and I do not think of subscribing to insurance products as an investment."
Meanwhile, KIRI said the subscription rate among those in their 60s or older increased at an average 4.7 percent from 2010 to 2019.
"With longer life expectancy, the aged population want to ensure they are financially stable in retirement," KIRI said.
It noted that 19.1 percent of the life and health-related insurance products allow those aged 80 or older to subscribe.
