Insurance in Japan: Your 4-Part Survival Guide - Part 2: Life, Income, and Long-Term Care Insurance

In this blog, we’re diving into three more types: life insurance, income insurance, and mandatory long-term care insurance.

1.Life Insurance: Planning for death and heavy disability

In Japan, life insurance (生命保険 seimei hoken) is incredibly common—about *90% of households have some form of it. While it’s not required, it’s culturally seen as a responsible step for protecting your family.

*Data source: https://www.statista.com/statistics/1283347/japan-life-insurance-ownership-households/

Here are the three main types:

• Term Life Insurance (定期保険 Teiki Hoken)

• Affordable and provides coverage for a set period.

• Example: ¥2,000/month for ¥10 million coverage.

• Ideal for short- to mid-term residents or those wanting to cover the working years.

• Whole Life Insurance (終身保険 Shūshin Hoken)

• More expensive (e.g., ¥10,000+/month).

• Offers lifelong coverage plus a savings component with cash value.

• Income Protection Insurance (収入保障保険 Shūnyū Hoshō Hoken)

• Provides monthly payouts to your family (like a salary) if you pass away or become severely disabled.

• Popular among households with children.

• Cheaper than whole life due to decreasing coverage over time.

• Usually has no refund upon cancellation.

👉 Do You Need Life Insurance in Japan?

If you have dependents (spouse, kids) living with you in Japan, yes, it’s worth considering. But if you’re only in Japan for a few years and already covered in your home country, it may not be necessary.
💬 HR Tip: Some companies provide group life insurance as a benefit—check your employment contract before buying a separate policy.

📌 Tax Perk

Life insurance premiums can reduce your taxable income by up to ¥40,000/year. If you’re employed, just submit the annual insurance statement (保険料控除証明書) to HR during year-end tax adjustment (年末調整). Your insurer will send this to your address in the fall—don’t throw it away! If you cannot find it, you can ask insurer to re-issue it, but it takes time.

2.Income Protection Insurance & Disability Coverage

First of all, Japan’s public healthcare system provides basic income protection:

• High-Cost Medical Expense Relief (高額療養費制度)
  Caps your out-of-pocket payments on major medical bills.

• Sick Leave Allowance (傷病手当金制度)
  If you’re employed and can’t work due to illness/injury, this pays about 60% of your salary for up to 18 months. Again, this is company offered health insurance only.

So why get extra income insurance?

Because medical costs aren’t the only hit—your lost income can be just as painful. This is especially important if:

• You’re self-employed or run a business (no paid sick leave!)

• You’re the main breadwinner

• Your workplace offers limited leave. Check the rules of employment.

📌 There are two types:

• Short-term income insurance (所得補償保険): Covers temporary illness or injury (e.g., a broken leg or surgery recovery). Or You want to prepare for a potential decrease in income only during a certain period when your child’s education expenses are high.

• Long-term disability insurance (就業不能保険): For permanent or long recovery scenarios (e.g., stroke, chronic illness).

3. Long-Term Care Insurance (介護保険 Kaigo Hoken)

This is Japan’s mandatory safety net for everyone aged 40 and over—including expats.

• Premiums: Typically ¥5,000–¥10,000/month

• Collected via your health insurance or deducted from your pension

• Pays for nursing homes, in-home care, rehab, and more

How It Works:

• At age 65 (or 40+ with certain conditions), you can apply for support.

• The local government evaluates your needs and assigns a care level (1–5).

• You pay 10% of approved service costs—a huge relief.

Example: ¥100,000/month nursing care → You pay only ¥10,000

📌 Real Story: My friend (Age 43 ) had cancer and required monthly nursing care costing ¥300,000. Thanks to Kaigo Hoken, her monthly cost dropped to ¥30,000.

Do You Need It?

• If you're over 40, you're already enrolled—it’s deducted automatically.

• If you're under 40, you’re exempt (for now!).

• It’s optional to use, but many families rely on it during aging or illness.

📌 Tip: File early—it takes time to get assessed and approved.

Wrap up:

I once worked for an investment firm whose parent company was a health insurance provider. Naturally, we had access to group health insurance. While employees with families appreciated the benefit, many single employees didn’t find much value in it.

I received several requests to introduce short-term income protection or long-term disability insurance instead— and honestly, it made sense. I gathered quotes from three potential providers and presented the proposal to our management committee… but, unfortunately, it went nowhere. Gaaaaa!

Coming Up Next: Part 3: Earthquake, Fire, and Property Insurance
Japan’s wild side—earthquakes, typhoons, floods—can wreak havoc. Make sure your home, belongings, and safety net are ready. Don’t miss it!