Chairman Lee Soo-chang of the Korea Life Insurance Association.

Chairman Lee Soo-chang of the Korea Life Insurance Association (KLIA) said the government should expand incentives for financial products needed for retirement. He said that when people prepare for retirement by themselves, they save government money, because if they don’t the government would have to allocate more money to its pension system.

The KLIA chairman, who celebrated his first year at KLIA on Dec. 9, told local media that his mission as the head of the KLIA is to expand the culture of retirement preparedness, along with boosting consumer trust in the life insurance community.

Lee said a key issue among the government and financial circles has been boosting the people’s assets ahead of retirement, and the best way to do that is through the subscription of various life insurance products.

He has been pushing the three-year plan “Happy Life in the Age of 100 Years” to expand the culture for retirement preparation.

“Happy Lives” puts enough financial resources in people’s hands to ensure them a comfortable retirement.

Lee has also been pushing increasing tax incentives for insurance products for retirement planning so that people can prepare for their retirement. He said that if they don’t prepare for their retirement, the government would have to expand welfare programs, costing the taxpayers more money in the end. He pointed out that both Europe and the U.S. have retirement products ready for people aided with tax incentives. 

Lee also urged consumer protection plans be put into place, as insurance products are very hard to understand for most customers. He wants to eliminate misunderstanding of insurance products on the part of the customers. The insurance agents should make sure that their customers understand the insurance products.

Lee also said the intensive competition among insurance firms could benefit consumers in the end. The recent easing of laws and regulations on the life insurance industry cannot but boost competition among life insurance firms. He said small- and medium-sized life insurance firms can make their operations profitable with their own marketing strategies, which large life insurance firms cannot emulate.

Those life insurance firms could handle the special insurance products such as those for sicknesses and senior citizens so that they can be more competitive, which should make the ecological picture of the life insurance industry more diverse, Chairman Lee said.

He said Korea will be a senior-aged society by 2017, and by 2026, Korea will be considered a “super old-aged society.” He added that the country is far from ready for this eventuality. He will let the country know that every working person should know that he has to be ready for his life after retirement through life insurance.

Judging by the current population trends, their numbers will increase quickly, boosting the government’s welfare payouts.

He questioned how the country can take care of old people while the number of people paying taxes — because of retirement — is falling year after year.

The Korea Life Insurance Association (KLIA) was established in 1950 as a non-profit corporation and has remained committed to promoting common benefits for member companies and maintaining market discipline. In addition, it has contributed to the development of the life insurance culture. KLIA has 22 life insurers as full members and two associate members, Korean Re and IBK Pension Insurance.

Chairman Lee Soo-chang of KLIA, 3rd R,  raises his right arm with others at a recent meeting of life insurance firms in Korea.(Photos:KLIA)