Death Insurance, Severance Pay, Survivor Pensions and Inheritance

The nature of death insurance money depends on who is written in the beneficiary field of the policy. If a specific person, such as the spouse or a child, is named as beneficiary, the insurance money is that beneficiary's own property. Even if the beneficiary is written only as 'heirs', or the insured event occurred without any beneficiary being named, case law treats the money as the heirs' own property received directly under the insurance contract (Supreme Court Decision 2000다31502 of December 28, 2001; Supreme Court Decision 2003다29463 of July 9, 2004).

So, as a rule, this kind of insurance money can be received regardless of renunciation of inheritance (상속포기), and the deceased's creditors cannot take it as part of the estate. On the other hand, if the beneficiary is the deceased themselves, the insurance money becomes the deceased's property and part of the estate. If you do not have the policy, check the contract terms separately with the insurers shown in the Safe Inheritance (안심상속) search results.

For accident insurance where the beneficiary was written only as 'legal heirs', the Supreme Court held that, unless there are special circumstances, each heir can claim the portion of the insurance money that corresponds to their inheritance share (Supreme Court Decision 2015다236820 of December 22, 2017). For a mother and two children, for example, the split would be 1.5 to 1 to 1.

If one sibling collected the full amount from the insurer, you can claim back the part that exceeds their share. If a family member renounced the inheritance, whether that person is counted in the proportions may be disputed depending on the policy terms and the case, so check this before claiming from the insurer.

Where a father paid the premiums and then changed the beneficiary to someone who is not an heir, and that person received the insurance money, case law treats this as a gift to that person that can be counted in the forced heirship share (유류분) calculation. The amount of the gift is not necessarily the full insurance payout; it can be calculated by multiplying the payout by the proportion of the premiums paid that the father paid (Supreme Court Decision 2020다247428 of August 11, 2022).

If only one of the siblings was named as beneficiary, the dispute is whether that insurance money counts as a share received in advance (special benefit, 특별수익). Documents showing who paid the premiums, when the contract was made and when the beneficiary was changed are important.

For the National Pension survivor pension and industrial accident survivor benefits, the law sets who receives them and in what order. The test is whether the person shared a household or depended on the deceased, so the recipients may differ from the heirs, and sometimes a de facto spouse receives them. These are not part of the estate, so they can be received even after renouncing the inheritance.

Whether death severance pay is the survivors' own money or part of the estate depends on whether the company's rules or collective agreement provide for it to be paid directly to survivors. If the death was caused by an accident, the deceased's own compensation for emotional distress and lost future income, claimed from the person responsible, is part of the estate, while each survivor's own compensation for emotional distress belongs to that survivor. If you renounce because of debts, you cannot receive the compensation belonging to the deceased, so you need to decide in the right order.