Insurers expand children's coverage as policy support fuels race for long-term customers

First-graders greet each other on their first day of school at Daegu Jangdong Elementary School, March 3. Yonhap

Insurers are expanding children’s coverage as they race to lock in long-term customers, buoyed by government efforts to tackle low birthrates and ease the cost of child rearing, industry officials said Thursday.

In a market for people aged under 15 worth around 9.4 trillion won ($6.18 billion) per year, new products are evolving quickly. Some have introduced coverage that increases over time, while others extend protection beyond childhood, spanning from the prenatal stage through adulthood.

The scope of coverage is also broadening. Once centered on cancer and critical illness payouts, policies are increasingly designed around a wider spectrum of risks, including mental health care, counseling and even school violence.

Last month, Tongyang Life rolled out a policy where benefits grow with time. After 20 years, when the policyholder reaches adulthood, the payout can double. A 50 million won cancer benefit at signup, for instance, would rise to 100 million won.

“Underage policyholders are a key long-term customer base. These policies tend to stay in force as they grow up and can later be extended into regular health or whole life insurance,” a Tongyang Life official said.

Hyundai Marine & Fire Insurance, the longtime leader in the market, has also been expanding its offerings. Coverage can now include developmental and congenital conditions, as well as mental health issues such as depression and panic disorder. Some plans have recently been expanded to cover treatment for high-risk pregnancies.

KB Insurance is following suit, adding protection for conditions like ADHD and Tourette’s syndrome.

The industry’s growing push into children’s insurance reflects its long-term profitability. Policies are often held for 20 years or more, with relatively low surrender rates, giving insurers a steady, predictable stream of income.

At the same time, demographic and policy shifts are adding further momentum. Korea saw 255,000 births last year, up 16,000 from a year earlier — the largest increase since 2010, according to the Ministry of Data and Statistics.

Since April, major insurers have also begun offering premium discounts on policies for households with young children as part of a broader government push to support childbirth and parenting.

Together, these factors are escalating competition to sign customers early and keep them for decades.

“As coverage in children’s insurance continues to expand, competition among insurers is likely to intensify. But it won’t be just about offering more benefits; it will increasingly come down to how well companies tailor products and services to customers’ evolving needs,” an industry official said. “From a consumer standpoint, that’s a positive shift as it broadens choice and allows for more finely tuned coverage.”