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Sixty-five percent of South Korea’s roughly 40 million indemnity insurance holders filed no claims at all last year.
Meanwhile, the top 9% of claimants collected 74% of all payouts.
To fix this imbalance, Korea launched its 5th-generation health insurance Korea plan on May 6, 2026, and a conversion discount for older policyholders starts this November.
If you’re weighing a switch, what should you check first?
This guide breaks down the essentials of 5th-generation health insurance Korea conversion.
You’ll learn why non-covered coverage shrinks, how the new conversion rider works, and what withdrawal conditions apply before you commit.
What is 5th-generation health insurance Korea?
5th-generation health insurance is a Korean indemnity plan that splits coverage into a base contract for National Health Insurance (NHI)-covered care and a separate rider for non-covered treatment, pricing premiums by how much non-covered care you actually use.
Sales started on May 6, 2026.
Older plans charged similar premiums regardless of actual usage.
The new structure raises your share of costs as your non-covered spending rises.
Premiums run about 30% lower than 4th-generation plans, and up to 88% lower than 1st- and 2nd-generation plans (Source: Seoul Economic Daily, 2026).
65% of policyholders filed zero claims last year, while the top 9% collected 74% of all payouts.
The 5th-generation reform was designed to ease that imbalance.
(Source: Financial Services Commission, 2026)
Why does non-covered coverage shrink after conversion?
Your out-of-pocket rate for non-severe, non-covered care rises from 30% to 50%, and the annual coverage cap drops from 50 million won (about $36,000) to 10 million won (about $7,200).
Coverage for severe illnesses like cancer, stroke, and heart disease still keeps the 30% co-payment.
| Item | 4th Gen | 5th Gen (non-severe rider) |
|---|---|---|
| Non-covered co-payment | 30% | 50% |
| Annual coverage cap | 50M won (~$36,000) | 10M won (~$7,200) |
| Severe-illness co-payment | 30% | 30% (unchanged) |
Manual therapy, shockwave therapy, proliferation therapy, certain non-covered injections, and unlisted new medical technologies are excluded from coverage.
(Source: KB Think, 2026 / Seoul Economic Daily, 2026)
If you regularly use non-covered physical therapy like manual therapy, your out-of-pocket costs after conversion could be higher than expected.
Review your treatment history before you switch.
Should you convert now, and what should you watch for?
Conversion is optional — you can keep your current-generation policy if you prefer.
Older policies can’t be re-purchased once cancelled, so use the official conversion process instead of cancelling and reapplying.
Switching through the standard conversion rider usually requires no new underwriting.
You may need a review, though, if you expand your coverage or reapply after withdrawing a previous conversion.
You can withdraw within 6 months under certain conditions.
Within the first 3 months, you can withdraw even if you’ve already filed a claim.
After 3 months, withdrawal requires that no claim has occurred since converting.
✅ Check how often you’ve used non-covered care (manual therapy, non-covered injections, non-covered MRI) in the past 1-2 years
✅ Compare your current premium with the projected post-conversion premium
✅ Confirm the 6-month withdrawal window and its conditions
✅ Ask your insurer whether expanding coverage requires underwriting
✅ Get official confirmation from your agent or insurer’s call center
For more on navigating Korea’s healthcare system, see our (internal link: replace after related articles are published) Hospital Guide for Korea category.
What benefits do pre-2013 policyholders get when converting?
If you enrolled in 1st- or 2nd-generation insurance before March 2013 and convert to 5th-generation, you get 50% off your premium for the next 3 years.
This is called the “contract conversion discount,” starting in November 2026.
An “optional discount rider” is being introduced around the same time to ease the transition for older policyholders.
Regulators are also discussing letting 1st- and 2nd-generation policyholders who bought their plan as a rider convert only the rider to 5th-generation, without being forced into a standalone policy.
(Source: Money Today, 2026)
Pre-March-2013 (1st/2nd generation) policyholders get a 50% premium discount for 3 years when converting starting November 2026.
Confirm exact timing and eligibility with your own insurer.
Frequently Asked Questions
1. Is converting to 5th-generation health insurance mandatory?
No. Conversion is optional — you can keep your existing-generation policy if you prefer.
2. Do I lose my current coverage if I convert?
Once you convert, the 5th-generation terms apply going forward.
Check the higher non-covered co-payment and excluded items first so you’re not caught off guard.
3. Can I cancel (withdraw) after converting?
Yes, under certain conditions you can withdraw within 6 months.
After 3 months, withdrawal requires that no claim has occurred since you converted.
4. How is the conversion rider structured?
It has a base contract covering NHI-covered care, plus non-covered riders split into severe and non-severe categories.
The non-severe rider now carries a higher co-payment and a lower coverage cap than before.
5. When do pre-2013 policyholders get the discount?
The contract conversion discount is set to start in November 2026, offering 50% off premiums for 3 years after conversion.
Confirm the exact date with your insurer’s official notice.
References
(Financial Services Commission of Korea), “Press Release on the Implementation of 5th-Generation Health Insurance” (5세대 실손의료보험 시행 관련 보도자료), 2026. Link
(KB Kookmin Bank), “5th-Generation Health Insurance Launch: What’s Changed and What to Check Before Converting” (5세대 실손보험 출시, 달라진 점과 전환하기 전 확인 사항), 2026. Link
(Seoul Economic Daily), “Korea Unveils 5th-Generation Medical Indemnity Insurance with Up to 88% Premium Cut,” 2026. Link
(Money Today), “Conversion Riders Now Allowed When Switching from Old Indemnity Plans to 5th-Generation” (‘옛 실손→5세대’ 갈아탈때 ‘특약’도 허용..GA 부당승환 막는다), 2026. Link
This article is for general informational purposes only and is not a substitute for professional medical advice, diagnosis, or treatment.
Please consult a qualified healthcare provider if you have health concerns.
Whether to convert your policy depends on your own claims history and finances, so consult your insurer or a licensed insurance advisor before deciding.
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