Reasons to Carefully Consider Cancelling the Yellow Umbrella Pension and How to Cancel

While the Yellow Umbrella Savings Plan (노란우산공제) is a reliable retirement solution for self-employed individuals, some may consider cancellation due to unavoidable circumstances. However, since the Yellow Umbrella Savings Plan is more than just a simple savings product, careful consideration and thorough research are crucial before cancellation. This article details the potential losses associated with canceling the Yellow Umbrella Savings Plan, outlines the cancellation process, and introduces alternative options to cancellation.

Why Should You Carefully Consider Cancelling the Yellow Umbrella Savings Plan?

• Tax Burden: The refund received upon cancellation of the Yellow Umbrella Savings Plan is subject to miscellaneous income tax. It is often the case that you won't receive all the money you paid back.
• Loss of Income Tax Deduction Benefits: The Yellow Umbrella Savings Plan offers significant income tax deduction benefits. Cancellation means losing these benefits.
• Loss of Compound Interest: The Yellow Umbrella Savings Plan operates on compound interest. Early cancellation means forfeiting the accumulated compound interest.

Things to Know Before Cancelling the Yellow Umbrella Savings Plan

🔗 Reasons for Cancelling the Yellow Umbrella Savings Plan and Refund Amount

• Withdrawal and Contract Cancellation: You can withdraw your application within 30 days of enrollment, and you can cancel the contract under certain conditions.
• Payment of Benefits: Benefits can be paid out in cases of illness, injury, or business suspension.
• Loans: Subscribers to the Yellow Umbrella Savings Plan can receive loans using the benefits as collateral.

Reasons for Cancelling the Yellow Umbrella Savings Plan

• General Cancellation: Cancellation at the subscriber's discretion.
• Deemed Cancellation: In case of business transfer, corporate conversion, or other specific events.
• Forced Cancellation: In case of non-payment of premiums or other specific events.

How to Cancel the Yellow Umbrella Savings Plan

• Yellow Umbrella Savings Plan Website: Convenient online cancellation application.
• Local Small and Medium Business Administration: Cancellation application by visiting in person.

Taxes Incurred When Cancelling the Yellow Umbrella Savings Plan

• Miscellaneous Income Tax: Miscellaneous income tax is levied on the refund amount.

Alternatives to Cancelling the Yellow Umbrella Savings Plan

• Loans: Obtain a loan using the benefits as collateral to secure emergency funds.
• Benefit Payments: Receive and utilize benefit payments if specific conditions are met.

Conclusion

Cancelling the Yellow Umbrella Savings Plan should be a carefully considered decision. Consultation with a professional and exploration of various alternatives before cancellation are recommended.

FAQ

• How much will I get back if I cancel the Yellow Umbrella Savings Plan? This varies depending on the amount paid and the cancellation date; you will receive the amount minus miscellaneous income tax.
• Can I re-enroll in the Yellow Umbrella Savings Plan after cancellation? Yes, but your previous enrollment record may remain.
• Under what circumstances can I get a loan from the Yellow Umbrella Savings Plan? Loans are available using the benefits as collateral; loan types and interest rates vary depending on the circumstances.