The anticipated reduction in insurance product interest rates is drawing closer.
On June 16, Caixin reported the launch of a new round of insurance product “interest rate cuts,” highlighting Tongfang Allianz Life Insurance as the first to introduce a dividend insurance product with a 1.5% interest rate. On June 19, Guangzhou Daily mentioned that the interest rate might drop from 2.5% to 2%. As the saying goes, “The duck knows first when the river warms in spring.” The first to act were some stable joint venture companies, which have withdrawn products such as: – Aviva-COFCO Life: Yuehuo Life, Xinying Family, Aishouhu 3.0; – Fosun Bund Life: Xingfujia Longteng Edition (Dividend), Xingfujia 2024 (Dividend), Xingyingjia (Phoenix Edition); – Tongfang Allianz Life: Chuanshi Lexiang (Dividend), Tongyao Fengnian (Dividend), Tongyao Xinxiang 3.0 (Dividend). Some high-value products have also been withdrawn, such as: – Junlong Life: Popeye (Preferred Edition); – Beijing Life: Dahuangfeng 12 (Renewal Edition). Many popular insurance products have removed certain payment terms, including: – Super Mary 13, Perfect Life 7, Darwin Beyond, Dahuangfeng 13 (All-in-One Edition), Dahuangfeng 13 (Flagship Edition), Qingyunwei 5. Adjustments are underway. Some have commented: “After spending much time researching insurance, I found the chosen product was already discontinued.” In the coming months, such cases may increase. Therefore, securing preferred products early is advisable. Under current interest rate conditions, a rebound in the interest rate is unlikely. This means the current products may remain the best options for years to come. The reduction in interest rates primarily affects critical illness and savings insurance. Looking at past adjustments: 1. Critical illness insurance has become increasingly expensive. Both adult and child critical illness insurance become pricier as interest rates decline, with child insurance showing higher price increases. If the interest rate drops to 2%, annual premiums could rise by several hundred yuan, accumulating to over ten thousand yuan over 30 years. Purchasing critical illness insurance early is recommended for broader product options, better underwriting chances, and lower costs. Darwin 11 Fosun United Health Critical Illness Insurance Optional Additional Disease Coverage Cancer/Cardiovascular Protection View Review We will release a July critical illness insurance ranking soon. Stay tuned or schedule a consultation for product comparisons and health assessments.2. Incremental Life Insurance with Declining Cash Value
Even with the same premium payment of 250,000, after two reductions in the predetermined interest rate, the cash value at the 20th year is directly reduced by 81,000, and by 164,000 at the 30th year… If the rate drops to 2.0%, returns may further decrease by 10%~20%. Currently, the five-year deposit interest rate at major banks is only 1.3% simple interest, while incremental life insurance offers nearly 2.5% compound interest. Even over just five years, high-quality products outperform deposits by a significant margin. Product: Zeng Duoduo 8 (Celebration Edition) Issuer: Haibao Life Insurance Type: Life Insurance Features: Effective insured amount increases by 2.5% annually, rapid cash value growth, high long-term returns View Review If interest rates continue to decline, incremental life insurance can lock in rates, ensuring steady asset growth. If rates rise, policyholders can switch to higher-yield products, offering flexibility. If you missed incremental life insurance products with 3.5% or 3.0% rates, now is the time to act. For personalized recommendations based on your budget and needs, schedule a consultation with an advisor. 3. Annuity Insurance with Decreasing Payouts At a predetermined interest rate of 3.5%, a total premium of 250,000 would yield annual payouts of approximately 40,000, exceeding the premium in just over 6 years. Now, it takes over 10 years. Is it still worth purchasing pension annuity insurance with a current predetermined rate of 2.5%? Aging is inevitable, and retirement planning is essential. With mounting pressure on social pension funds, inadequate preparation can lead to financial hardship in later years. Some high-yield pension annuity products now offer long-term returns exceeding 3%, providing lifelong payouts, making them ideal for supplementing retirement income. Product: Furu Weilai Issuer: Haibao Life Insurance Type: Annuity Insurance Features: Optional guaranteed payout, high payout amounts View Review Reflecting on recent rate reductions, one of the wisest decisions was purchasing a universal insurance product with a guaranteed 3% rate. Colleagues who secured incremental life insurance at 3.5% or annuity insurance at 4.025% are now envied by many. In the insurance industry, we leverage information asymmetry to identify scarce products and share these insights. Yesterday is history, tomorrow is uncertain, but the present is a gift.
