One phone call can cut your national health insurance premium

National health insurance policyholders who have gone without hospitalization or surgery will soon be able to secure a premium discount with a single phone call. Until now, many eligible customers missed out on the benefit because they had to track application deadlines themselves and manually select a discount type.

The Financial Supervisory Service announced Monday that it has revamped the "no-claim contract conversion system" to make it more consumer-friendly.

Under the no-claim contract conversion system, policyholders enrolled in a national health insurance product that carries this feature can have their premiums reduced — while keeping their coverage intact — if they go a set period without hospitalization, surgery or a serious-illness diagnosis. For example, a man in his 40s enrolled in a simplified insurance plan at one insurer could receive a 6.5 percent discount after one claim-free year and a 45.9 percent discount after 10 claim-free years.

Yet take-up has been low. As of the end of May this year, about 10.81 million policies carried this feature. Of the roughly 6.57 million that had been in force for more than a year, only about 1.16 million — or 17.6 percent — were actually receiving a discount. The FSS believes the number of eligible policyholders is far higher.

The FSS attributed the low uptake to cumbersome procedures. Some insurers sent notification messages only once a year and only before the policy anniversary date. Because the notices did not compare premiums before and after conversion, many recipients mistook them for promotional messages. Some insurers also required in-person branch visits or agent assistance to apply, even though the initial notification was sent digitally. Policyholders also had to choose conversion types themselves — codes such as "325" or "335" — and unfamiliarity with the terminology meant some customers with two claim-free years ended up receiving only a one-year discount.

The FSS said it will pursue improvements on five fronts: increasing the frequency of notifications and continuing to send them after the policy anniversary date; using multiple channels beyond messaging apps, including automated phone calls and postal mail; clearly labeling notices as "premium discount information" in the title and opening line, with before-and-after premium figures included; allowing applications by mobile or phone without requiring an in-person visit; and having insurers automatically apply the most favorable conversion type once a policyholder expresses intent to convert. Policyholders who receive a digital notice will also be able to complete the entire process — from application to review — in a single call to the number listed in the notice.

Insurers are expected to implement procedural changes immediately and complete updates to their IT systems and policy terms by January next year.

The FSS also outlined points for policyholders to keep in mind. Discounts take effect from the date of application and are not applied retroactively, so applying as soon as a notice arrives is advisable. Policyholders must also apply within the conversion window specified in their policy terms, which ranges from four to seven years. The FSS also urged anyone considering switching to a different insurance product due to premium costs to first check whether their existing policy qualifies for a no-claim conversion.

In addition, policyholders who fail to accurately disclose any hospitalization or surgery when applying for conversion will have the conversion voided and will be required to return any discounted premiums received.

"This is a case where we identified and addressed consumer rights violations during a proactive consumer protection inspection of the insurance sector conducted after our organizational restructuring," an FSS official said. "We will continue to do our utmost to protect consumers and enhance their benefits."