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Insurance products are long-term contracts and offer diverse coverage, so consumers should carefully consider before signing up. If one accidentally enrolls in an insurance product and cancels early, the refund may be less than the paid premiums, and contrary to consumer expectations, they may not qualify for benefits.

① Carefully examine product conditions

The Life Insurance Association advises that before purchasing insurance, individuals should thoroughly check the nature and terms of the product to confirm if it suits them. Insurance contracts consist of various elements such as the policyholder, insured party, premiums, payment periods, insurance duration, coverage, and exemptions. It's essential to be cautious to avoid enrolling in unnecessary products based solely on an insurance agent's recommendation.

In particular, due to the nature of insurance products, higher premiums mean greater coverage, so individuals should ensure that their expenditures on premiums are manageable based on their financial situation and salary level. Given the long duration of insurance, it is necessary to enroll at a level that does not become a burden. Utilizing the insurance product comparison disclosure provided by the Life Insurance Association can help compare coverage and savings products across different companies at once.

② Failure to fulfill disclosure obligations before contracting can lead to reduced benefits or denial of payment

An insurance contract is formed when the policyholder submits an application and the insurer accepts it. At this time, the policyholder must disclose various risk factors through the insurance agent. This is known as the obligation to disclose before contracting.

The obligation to disclose before contracting is generally fulfilled by filling out a questionnaire presented by the insurance company. Typically, the current and past illnesses of the insured as well as any direct driving status are crucial points of disclosure. If important information is not disclosed intentionally or through gross negligence, the insurance company may deny the application or reduce benefits or payment, so caution is necessary.

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After completing the application and product explanation, the policyholder must review the information provided and sign with their own hand. A handwritten signature is interpreted as agreeing to the contents stated in the relevant documents, so if there is inadequate understanding or questions arise, it is advisable to request additional explanations before signing.

After the contract is concluded, the policyholder should receive copies of the application, product description, and insurance policy through the insurance agent. These can serve as evidence in case of future disputes with the insurance company.

There are also aspects to be mindful of depending on the characteristics of the sales channels. When signing up for insurance through an agent, it is advisable to be aware of the excellent certification advisor system. Utilizing certified advisors recognized for contract maintenance rates and complete sales can provide greater assurance when enrolling in insurance.

Online insurance offers the advantage of convenience and lower premiums, but due to the nature of the products offered online, many provide simple coverage and may have no or low refunds upon early cancellation, so caution is advised.

Additionally, when enrolling in insurance through TM (telephone insurance) or bancassurance (insurance purchased at bank counters), one should listen to the explanations of the pros and cons of the relevant insurance product before making a decision. Particularly for elderly individuals, it is worth noting that a reconsideration period of up to 45 days is granted for TM insurance applications.

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③ Understand the withdrawal period after receiving the insurance certificate within 15 days

If one has mistakenly enrolled in insurance or if the enrollment lacked sufficient explanation, they can utilize the withdrawal option. The withdrawal period is generally within 15 days from the date of receiving the insurance certificate. If more than 30 days have passed since the application date, withdrawal is not possible, so caution is warranted.

If the insurance company does not provide the policy and copy of the application, has not explained the main contents of the policy, or the policyholder has not signed the application by hand, the contract can be canceled within three months from the establishment date of the contract.

If the policyholder applies for withdrawal within the withdrawal period, the insurance company must refund the entire premiums within three days from the withdrawal receipt date. If the refund is delayed, interest will be paid. However, caution is advised as if an insurance accident occurs after the withdrawal request, coverage will not be provided even if the premiums are refunded.

④ If premiums are overdue for an extended period, the contract will be canceled

The insurance contract begins coverage only after the first premium is paid. Therefore, the policyholder must promptly pay the premium after the contract is established. If premiums remain overdue by the payment deadline, the insurance company will notify the policyholder of a grace period of 14 days (7 days if the insurance period is less than one year).

Even with reminders, if premiums are not paid within the specified period, the insurance contract may be canceled. The insurance company will not be liable for claims arising after the contract is canceled, but it should be remembered that claims occurring within the grace period will still be paid.

In particular, the policyholder or insured must promptly inform the insurance company when a reason for payment, as defined in the policy, arises. This is crucial because in most cases, the insurance company may not be aware of the occurrence of an insurance accident. This obligation to notify can lead to delays in payment if confirmation is delayed, so attention is needed. Additionally, if the policyholder’s address or contact information changes, this must also be communicated to the insurance company, known as the obligation to notify address changes.