South Korea's financial watchdog is planning to inspect local life insurers this month over their denial of insurance payments related to suicides, putting further pressure on them to pay contracted money to the families of policyholders who kill themselves, industry sources said Sunday.   

More than 10 life insurers had sold policies for accidents that cover disaster-caused deaths as well as suicides between 2003 and 2010 before it changed the terms of the policies to exclude suicide.

Under the previous contract terms, the families of policyholders who commit suicide received far higher payments than those for general death.

But insurers denied the payouts, arguing that the suicide provision was incorrectly inserted into the contract and that payments for suicide would encourage people to kill themselves.

Late last month, the insurers took the case to court, defying an instruction by the Financial Supervisory Service (FSS) to pay the insurance money in arrears by the end of last month.

"We are planning on-spot inspections on (the life insurers) after completing a review of documents they submitted over the cases," said an FSS official.

The Fair Trade Commission, the country's corporate watchdog, is also mulling probes into the life insurers over a possible collusion, as they collectively denied insurance payments.

Market watchers estimated that the combined amount of unpaid policies for suicide cases is over 200 billion won (US$186 million).

According to 2011 data compiled by the Organization for Economic Cooperation and Development (OECD), South Korea's suicide rate was 28.4 per 100,000 people, the highest among OECD countries, followed by Hungary with 19.8 and Japan with 19.7.(Yonhap)