Cabinet approves reducing life insurance interest rates

The Koizumi Cabinet approved on May 23 a bill to amend the life insurance law to allow insurance companies to reduce the yields they promised to policyholders as a measure to prevent them from going bankrupt. In Japan, about 80 percent of households have private life insurance.

If the law is revised, the amount of insurance payments will be substantially reduced depending on the type of policy and terms of insurance.

The government intends to set the minimal interest rate at three percent. Thus, one million yen in insurance payments could be reduced to 620 thousand yen.

The proposed revision follows the government policy of drastically cutting the national annuity and forcing the people to pay more in taxes.

Akahata of May 24 stated, "The proposed revision of the law will rob the people of their life design. The Koizumi Cabinet should immediately stop shifting heavier burdens onto the people, admit its failure, and begin to work to fundamentally reconstruct economic and financial policies." (end)