Expats Need to Check Insurances From Home Country

By Kim Myung-soo

AIA Life Assistant Vice President

The number of foreign nationals in Korea is rising, with an estimated 1.2 million expats living in Korea. However, foreigners are faced with difficulties when trying to understand how Korean insurance plans work, and often experience headaches after studying complicated systems and products.

Nonetheless, it is worth knowing about insurance and the benefits it can provide to you as protection against unforeseen risks. To ease headaches, here are the answers to some questions foreigners most frequently ask about private and social insurance in Korea.

Q: If I have an old life insurance policy in my home country, should I keep that policy and continue to pay premiums, or do I need to buy a new one here in Korea?

A: First of all, you need to check the terms or provisions of the insurance policy you bought. The most critical issue is whether you are still covered by the policy while living abroad.

There could be policies that do not provide protection overseas or only under certain conditions. Insurance policies follow only the specified protection stated on your provision.

Equally important is your duration of stay in Korea. If you plan to settle down in Korea, it might be a good chance to search for products that could satisfy your needs for protection in Korean society. If you plan to go back to your home country in the future, though, it would be wise to keep your policy especially if it is a Whole Life Policy.

Q: If I am going to live in Korea permanently, what should I do with my policy?

A: If you are going to live in Korea permanently, you could compare your current your [foreign] policy with the policies offered in Korea. If the benefits are the same, it is always more efficient to choose a policy with a lower premium. However, this does not mean that you have to surrender your current policy.

If you are to maintain your policy, you need to check how you to claim agreed benefits from the current policy.

Each company has their own process on claims, so it would be more timesaving to check out the process and required documents in advance. Also, to prevent the policy from being overdue, you need to monitor the account for premium payments continuously.

Q: I have questions about social insurance programs in Korea. What kinds of supports are offered?

A: The social insurance program in Korea offers security for medical care and income by providing industrial accident, pension and insurance.

First of all, there is the National Health Insurance Corporation (NHIC), under which you pay premiums based on your income, but receive the same benefits. Professional technicians, visiting and living-together workers, and work trainees can apply for this program voluntarily.

Secondly, the National Pension is a program which offers different benefits based on the premiums paid. Its main goal is to provide basic livelihood when people cannot perform income-generating activities. Professional technicians and working trainees are subject to the Korean National Pension program if they are citizens of the countries where Korean citizens are covered in their national pension schemes under the reciprocity principle.

Thirdly, Employment Insurance provides employment stability program and vocational education & training program as well as traditional unemployment system. Professional technicians, visiting workers, and working trainees are given worker status in Korea, and accordingly, are allowed to join this program.

Finally, the Industrial Accident Insurance was introduced to protect workers from industrial accidents. It plays an important role in protecting and compensating workers injured or died by industrial accidents and their families. It is a compulsory insurance program where the government ensures post-accident livelihood of workers and their families.

Q: Could you specify more about the people classified as employed insured?

A: The employed insured are those registered as foreigners at the Immigration Office and are the employers or the employees of workplaces in Korea covered as the employee insured. It is a compulsory program for foreigners who work at the workplaces under the NHI since January 2006. However, foreigners receiving medical benefits under foreign law and insurance or those who receive medical benefits under contract with employer can be excluded. Foreigners who have the status of sojourner and are excluded from the category of the employee insured can be the self-employed insured on the voluntary basis. Please check NHIC website (www.nhic.or.kr) for more information.

Q: If I am covered by the NHIC, can my wife and children enroll in this as well?

A: Dependents of the employed are qualified from the date of declaration, but should be declared within 30 days of the occurrence of the event. The selfemployed and insured are qualified 3 months after entry, but when entry is for reasons of employment or entrance to school, qualification is acquired from date of entry. The monthly contribution is calculated by multiplying monthly income with contribution rate of which 50% is paid by the employer.

Q: If I am covered under NHIC, how much do I have to pay when I see a doctor?

A: The insurance benefits for foreigners are all the same as those for the Korean nationals. A patient is required to pay 20% of the total medical charges for inpatient care and 30 to 50 percent for outpatient services depending on the level of health care facilities or the total amount of service charges. In addition, the NHIC is providing cash benefits including childbirth expenses.

Q: Are foreigners subject to National Pension Scheme too?

A: Similar to the NHIC, foreigners aged between 18 and 60 residing in Korea are subject to the compulsory coverage of the National Pension Scheme, the same as Korean nationals.

Foreigners whose countries don’t cover Korean nationals under their public pension schemes, however, are excluded from coverage under the NPS.

Q: When I return to my home country, can I get a refund?

A: In principle, a lump-sum refund is not paid to foreigners, however, in the case of foreigners whose home country has concluded a social security agreement with Korea to secure benefit rights by combining the insured period in each country, or whose country grant Koreans a benefit corresponding to a lump-sum refund, or whose stay visa falls under E-8/9 or H2 visa can receive a lump sum refund.