Conclusion
In our household, we have canceled our medical insurance, cancer insurance, and income protection insurance, keeping only life insurance (death benefit), fire insurance, earthquake insurance, and car insurance.
Our decision-making criteria are based on the idea of ‘not relying on private insurance for areas covered by public systems’ and ‘keeping only those that cover major risks not covered by public systems or those that are practically essential to have.’
However, this is just one example tailored to our household’s circumstances and is not a correct answer that applies to everyone. Since cancellation is a decision that is difficult to reverse, I will share this information with that point in mind.
Insurance is a ‘major fixed cost’🦁
When considering savings, fixed costs are the first candidates for review. Among them, insurance premiums continue to be incurred every month and every year, and the burden increases as the number of insurance policies you have increases.
On the other hand, since insurance is a ‘provision for emergencies,’ we also want to avoid a situation where we cut back too much and end up in real trouble.
Therefore, in our household, we reorganized by clarifying ‘what happens and how much money will be lacking,’ confirmed how much can be covered by public systems, and then rethought the order of using private insurance only for the parts that are lacking.
What can be covered by public systems🪄
For company employees (those enrolled in health insurance, employees’ pension insurance, and employment insurance), there are the following public systems.
The High-Cost Medical Expense Benefit system is a public medical insurance system in which the amount exceeding a certain limit paid at the counter of medical institutions or pharmacies is refunded.
The Injury and Sickness Allowance is an allowance paid by health insurance to company employees and others during periods when they cannot work due to illness or injury and cannot receive their salary.
It is a major difference that this system does not, in principle, exist for the National Health Insurance that self-employed individuals enroll in.
⚠️Points to note⚠️
The High-Cost Medical Expense Benefit system was revised in August 2026
One piece of the latest information to keep in mind here is that the High-Cost Medical Expense Benefit system was revised starting in August 2026.
The monthly out-of-pocket limit has been raised for each income bracket, and at the same time, a mechanism has been newly introduced to set an upper limit on annual out-of-pocket expenses (from August to July of the following year). Furthermore, a phased review is also scheduled for August 2027.
In other words, even if you say ‘it’s safe because there is a public system,’ the content of the system changes. Since the specific upper limits differ depending on the income bracket and are subject to change in the future, please check the latest information when making decisions.
What our household canceled and the reasons why
Our household canceled the following three items.
The reason is that we determined that most of these areas can be covered by public systems.
Public systems provide the first line of support, such as the High-Cost Medical Expense Benefit system for high medical costs, injury and sickness allowances for when you cannot work due to illness or injury, and employment insurance for when your income is cut off.
Furthermore, we concluded that it is more rational to use the money we would have spent on monthly premiums for private medical and cancer insurance to increase our emergency savings or invest it instead.
What our family has kept and why
On the other hand, we have kept the following insurance policies.
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Life insurance (death benefit): Due to my husband’s pre-existing condition, we were unable to join a group credit life insurance (danshin) plan. Our mortgage is a joint pair-loan type, and generally, in a pair-loan, each person joins a group credit life insurance plan for their own share of the debt, but we are unable to do that. Therefore, we have kept life insurance (death benefit) to prepare for the unexpected happening to me (the wife). We are using private life insurance to cover the part we cannot rely on group credit life insurance for.
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Fire and earthquake insurance: Housing damage can easily become very expensive and is not of a nature that can be sufficiently covered by public systems, so we have joined as a necessary precaution.
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Automobile insurance: The amount of compensation in the event of an accident can be extremely high and difficult to cover with savings, so we consider it an essential precaution.
What they have in common is that we have kept insurance for ‘risks where the amount needed in an emergency is large and difficult to handle with just savings or public systems’.
Things to check before canceling
Canceling insurance is a decision that is difficult to reverse once you have let it go. When you are actually considering a review, please check the following points.
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If you are self-employed or a freelancer: Since there is no injury and sickness allowance, it is safer not to think based on the same assumptions as a company employee.
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If your savings are not sufficient: Even if public systems keep your out-of-pocket medical expenses down, costs not covered by public insurance, such as living expenses during hospitalization, room charge differences, and advanced medical care, will be out-of-pocket. Only when you have a certain amount of savings does it become easier to make the decision to reduce private insurance.
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Rejoining after cancellation: If your age increases or your health condition changes, you may not be able to rejoin under the same conditions. Cancellation must be decided carefully.
Checklist for considering ‘minimum private insurance’
✅ Have you organized how much money you would be short of in an emergency?
✅ Have you confirmed how much of that can be covered by public systems?
✅ What are the major risks that cannot be covered by public systems and are difficult to handle with savings?
✅ Have you secured enough emergency savings?
✅ Have you considered your family’s situation and future life events so you won’t regret it after cancellation?
Summary: The next step
In our family, we reviewed our insurance with the mindset of not relying on private insurance for parts that can be covered by public systems, and only preparing for major risks that public systems cannot cover with private insurance.
We canceled our medical, cancer, and income protection insurance, and kept our life insurance (death benefit), fire insurance, earthquake insurance, and automobile insurance.
However, the necessary coverage varies depending on your family’s situation, work style, and amount of savings. I would be happy if this serves as an opportunity for you to organize the details of the insurance you are currently enrolled in and think about ‘what are the truly necessary precautions’.
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