Unclaimed insurance payouts top W10tr as industry launches retrieval campaign

The Korea Life Insurance Association launched a nationwide campaign Tuesday with the Korea Inclusive Finance Agency to help policyholders reclaim unclaimed insurance benefits.

Unclaimed insurance benefits are payouts that have been approved but never collected by policyholders. Common cases include consumers who are unaware that their policy has matured, that interim or dormant benefits have accrued, or that retirement pension funds went uncollected after their employer closed or went bankrupt. Many policyholders also leave money unclaimed in the mistaken belief that interest continues to accumulate after maturity. Under current standard life insurance terms, policies earn 50 percent of the average declared interest rate for the first year after maturity and 40 percent for years one through three. No interest accrues after three years.

The total value of unclaimed benefits stood at about 10.3 trillion won ($7.79 billion) at the end of last year. About 3.25 trillion won was returned to policyholders last year. Annual campaigns and industry-wide reduction efforts have brought the figure down steadily — from 12.4 trillion won at end-2022 to 12.1 trillion won at end-2023 and 11.2 trillion won at end-2024.

Through the campaign, the association and the Korea Inclusive Finance Agency will promote "Nae Boheom Chajajum," an online service that allows users to check their insurance policies and search for or file claims on unclaimed benefits. Insurers, with support from the Financial Services Commission and the Ministry of Interior and Safety, will send written notices to policyholders' current addresses and also reach out via mobile.

This year's campaign focuses on elderly consumers who are less comfortable with online and mobile financial services. The association will strengthen offline outreach by partnering with consumer groups to demonstrate how to check for unclaimed benefits and assist people in looking up their policy details in person.

The association also cautioned consumers to verify the operator of any website or app before entering personal information, noting a rise in cases where sites and apps with names similar to "Nae Boheom Chajajum" have been used to collect personal data for insurance sales purposes.

Promotional materials will appear on apartment elevator screens, at life insurer customer service centers, and across everyday platforms including YouTube channels and blogs targeting general audiences and senior citizens. Individual life insurers plan to continue their own efforts to encourage policyholders to claim outstanding benefits.

"We will work with financial regulators and the insurance industry to improve financial access for the elderly and help consumers quickly reclaim their benefits," an association official said.