This file photo, taken June 22, 2022, shows bank officials handling loan programs at a bank in Seoul. (Yonhap)
SEOUL, July 5 (Korea Bizwire) — Loans issued to seniors over 60 years of age from insurance companies jumped last year, a lawmaker said Monday, citing data from the Financial Supervisory Service.
Loans taken out by seniors over 60 years of age from insurance companies reached 11.16 trillion won (US$8.55 billion) as of late December last year, up 10 percent from the previous year, according to Rep. Jin Sun-mee of the main opposition Democratic Party.
The increase rate was twice as high as the overall average (5.5 percent).
Sorted by type of loans, mortgage loans stood at 8.72 trillion won, up 8 percent from the previous year.
Credit loans stood at 1.32 trillion won, up by 17 percent.
The increase rate of both mortgage and credit loans among seniors over 60 years of age has surpassed the average increase rate of mortgage loans (5.8 percent) and credit loans (2.2 percent).
The borrowing surge among seniors over 60 years of age is largely attributed to a need for cash flow to sustain their livelihood, provided as a policy loan offered by insurance companies.
Policy loans offered by insurance companies take cancellation refunds as security. The debt service ratio does not apply to policy loans, without the need for a separate review.
M. H. Lee (mhlee@koreabizwire.com)
