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Regulator urges parents to close kids’ insurance gap

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The Financial Supervisory Commission (FSC), in conjunction with Taiwan’s annual Children’s Day on 4 April, has urged parents to review and close the insurance protection gap facing their children.

The FSC pointed out that the Insurance Law was amended in June 2020, under which, if the insured is under the age of 15 and has life insurance, accident insurance, or travel insurance, a maximum of NT$615,000 ($21,500) can be paid out for funeral expenses, from the various insurance policies in aggregate, in the event of the unfortunate death of the child.

The Insurance Bureau of the FSC, however, discovered in November last year that not all insurers had amended the clauses in their insurance policies to comply with the revision to the Insurance Law.

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Consequently, it directed that with effect from 1 December 2021, all property and life insurance companies allow payment for funeral expenses out of the proceeds of life insurance, accident insurance, and travel insurance policies where the insured is a child under the age of 15.

In addition, the FSC said that if a child insurance policy does not provide for payment of funeral expenses, (that is, a policy that only refunds premiums upon death), it cannot be used by insurance companies as the main marketing product for children under the age of 15. It can only be sold as a supplementary policy. The regulator said that at present, there are only disability insurance policies that do not provide for payments for funeral expenses out of the insurance proceeds.

The FSC says that there are other types of insurance policies that parents can buy, such as endowment policies to save for their children’s education, and health insurance to cover hospitalization and medical expenses.

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