Insurance policyholders who are parents will find that new legislation scrapping death benefits for children under 15 years of age is acceptable because it is the right thing to do, life insurers said yesterday.
“Insurance shouldn’t be used to make a profit or instigate a crime,” Johnny Wong (黃振國), chief marketing officer of New York Life Insurance Taiwan Corp (國際紐約人壽), said yesterday by telephone.
The ultimate purpose of insurance is to anticipate catastrophic losses that could financially impair the policyholder’s life or family, he said. Since juvenile policyholders are usually not the breadwinner of a family, their insurance should protect health, medical care or education, but not death benefits, he said.
The executive said most of his company’s policies for children had not included death benefits for more than a decade, so few changes would have to be made to comply with the new regulation.
Lin Chao-ting (林昭廷), a senior vice president of Cathay Life Insurance Co (國泰人壽), yesterday said that the company would be happy to revise products to comply with the new law. Cathay is the nation’s largest life insurance company.
He said he believed the majority of parent policyholders were well-intended when they purchased such policies with death benefits for their loved ones.
“Only in a rare exceptional case would parents be motivated to make a profit off their children’s insurance policies,” he said.
Lin, however, urged the regulator to clarify whether the new legislation would scrap death benefits for juvenile policyholders such as students, who are required by law to purchase group insurance.
The legislature on Thursday passed an amendment to Article 107 of the Insurance Act (保險法), which stipulates that only policyholders above 15 years of age be eligible for death benefits.
Beneficiaries of juvenile policyholders, however, would be entitled to a refund of already-paid premiums plus interest payments if young policyholders died before age 15.
The amendment was proposed to prevent parents from murdering their children for profit.
Beneficiaries of mentally challenged policyholders below 15 years of age will be entitled to claim an additional sum for funerals equivalent to half of the tax deduction for funeral costs, currently set at NT$1.1 million by the finance ministry.
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