Demand for dementia liability coverage growing in Japan

As the country’s population grows old, insurers are now offering policies or riders related to dementia

Demand for dementia liability coverage growing in Japan

Insurance News

By Gabriel Olano

As the Japanese population ages even further, insurance coverage for dementia-related conditions are becoming more common.

Data estimates by the Health, Labour, and Welfare Ministry show that by 2025, one in every five Japanese citizens age 65 and above are likely to suffer from dementia.

Mitsui Sumitomo Insurance Co. began offering in January a household fire insurance policy that had a special rider to cover damages caused by dementia patients wandering onto train tracks and causing accidents and halted train operations.

The product was inspired by a case wherein the family of a dementia patient was sued by a railway company after an accident where the patient got fatally hit by a train and disrupted the line’s operations. According to Mitsui Sumitomo Insurance, the rider is available for an extra premium of ¥2,500 (US$22) a year.

“We added the special clause to the fire insurance service purchased by many people because long-term care providers’ (liability) risk is growing,” a company official told the Japan Times.

Meanwhile, Taiyo Life Insurance Co, introduced in March last year an insurance policy that covers dementia treatments, where the insured can receive a lump sum of up to ¥3 million (US$26,500) if they exhibit dementia symptoms for 180 days.

According to Taiyo Life, around 220,000 policies, including related products, have been sold since June 2016. They decided to offer the product after interviews with customers revealed that they were anxious about developing dementia in old age.

Several other insurers, such as Sompo Japan Nipponkoa Himawari Life Insurance Inc. have also begun selling health or life insurance products with special clauses covering long-term nursing care due to dementia by providing lump-sum payments.

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