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Summary of U.S. Life Insurance Resale Law Regulations Based on the New York State Insurance Act

  • Legal Theory & Practice Review
  • Abbr : LTPR
  • 2020, 8(2), pp.247-267
  • Publisher : The Korea Society for Legal Theory and Practice Inc.
  • Research Area : Social Science > Law
  • Received : April 30, 2020
  • Accepted : May 19, 2020
  • Published : May 31, 2020

won, sang-chul 1

1용인송담대학교

Candidate

ABSTRACT

Life insurance contracts are insurance contracts that cover insurance accidents such as the death of an insured person. In the event of an insured person’s death within the insurance period, the insurance beneficiary receives the insurance money. However, at this time, the policyholder and the insured may not match. The motivations to buy life insurance are diverse, but the typical one is the Bequest Motive. The intention is to leave insurance money for the purpose of providing financial resources and inheritance tax for dependents left after the death of the insured. However, due to the nature of life insurance over a long period of time, the motivation for inheritance may be lost over time, and it may be difficult to maintain insurance contracts due to factors that cause financial difficulties such as unemployment and the provision of medical expenses. At this time, the policyholder selects the termination of the life insurance contract, and the insurance company pays the contractor a cash surrender value according to a predetermined schedule. The policyholder’s cancellation can be viewed as a process of returning the policyholder’s insurance policy to the insurance company. In the U.S., resale was allowed for the severely ill in the beginning, but it was later expanded to the elderly. In Korea, resale is not yet permitted, but discussions on the resale allowance can be resumed at any time in accordance with recent trends such as inclusive finance and consumer-oriented finance. Reselling life insurance is often an ethical criticism in that it deals with the life expectancy of the insured. The reason is that the sooner a subscriber dies, the higher the profit of a pre-sold investor. There may be a moral hazard of the insured, and there is also concern that an insurance company that has established a premium based on a predicted rate of termination may increase the premium due to an increase in the insurance premiums and a decrease in profits due to termination. do. In this study, I reviewed the insurance law related system of New York State in the US related to the purchase of life insurance and examined whether the Korean law could be introduced.

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