The marketization of life insurance rates has officially taken steps. Xiang Junbo, chairman of the China Insurance Regulatory Commission, recently revealed at a seminar on deepening the reform of the insurance industry that the State Council has recently adopted a reform plan for the pre-determined interest rate of life insurance. Although the pilot only starts with ordinary life insurance products, it is an important step to deepen the reform of the insurance industry.
The chief actuary of a domestic life insurance company pointed out that this reform is mainly aimed at traditional life insurance, such as term life insurance, whole life insurance, old-age security and critical illness insurance. , that is, non-dividend products, the scheduled interest rate is raised to 3.5%. He believes that this change will reduce the rate of long-term guaranteed products by 20%.
In its view, this reform is a good thing for the whole industry, but it has little impact on the pattern of the industry. For consumers, they will be able to buy guaranteed products at a price lower than that of dividend-paying products, which can be said to be an extra choice.
Earlier, some analysts believed that the marketization of life insurance rates will probably bring certain surrender risks. Actuaries agree with this, but he also points out that companies can take various measures to prevent and resolve this risk, such as "reinsurance".
If the rate drops, how will the sales of such products be affected? According to the chief actuary's analysis, the sales volume will not change much. Because basic ownership is a substitution effect, the possibility of buying insurance in Hong Kong will be reduced, but it will not affect the pattern of large dividend insurance and non-dividend insurance.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.