Table of Contents of Articles
1. What is dividend insurance?
2. How are the dividends of the participating insurance distributed?
3. Why has dividend insurance "made a comeback" and become the mainstream of the market?
Fourth, what are the main indicators to look at when buying dividend insurance?
1. What is dividend insurance?
Let's take a look at the definition of participating insurance:
If it is not easy to understand, let's take a look at the generation and development of dividend insurance:
From the perspective of the generation of participating insurance, participating insurance is a type of insurance in which policyholders and insurance companies "share profits and risks".
2. How are the dividends of participating insurance distributed?
One, the bonus**:
The product dividend comes from the product's spread, fee spread, death spread, surrender spread, etc., of which the spread dividend accounts for the main part, that is to say, when the actual investment rate of return of the insurance company is higher than the predetermined rate of return of the product at the time of design, the dividend is generated.
Then some people may also ask, the economic environment is not good, what if I buy it and lose it?First of all, participating insurance will have a guaranteed income, that is, on the basis of premium security, there will be a certain income (currently 2.).5%), and then on top of that is the floating bonus part.
Will there be big ups and downs in the distribution of dividends?This is generally unlikely. Because, laws and regulations allow insurance companies to do smoothing mechanisms. Under normal circumstances, life insurance companies will not regard all the annual earnings generated in the participating account as distributable surpluses, but will distribute them according to the expectations of the future economy, capital market and operating conditions of participating insurance, under the condition of ensuring that the future dividends are basically stable.
With the smoothing mechanism, insurance companies can stabilize the dividend level to a long-term sustainable level, avoid the risk of big ups and downs, maintain the reasonable expectations of customers and effectively protect their interests, and ultimately ensure the long-term healthy and sustainable development of the industry.
2. Dividend distribution standards:
Regulators stipulate that no less than 70% of the total account of the annual distributable surplus of an insurance company shall be enjoyed by customers.
3. Dividend distribution situation:
Dividend-paying products are divided into two types according to different distribution methods:
British dividends (incremental dividends) and American dividends (cash dividends).
3. Why has dividend insurance "made a comeback" and become the mainstream of the market?
To understand this question, we need to understand two diagrams:
Figure 1) History of changes in scheduled interest rates in China's insurance industry:
Figure 2) Proportion of premiums for participating insurance in the past 12 years.
How do you understand these two diagrams?
As we can see from Figure 1, the insurance industry was in a "period of continuous decline" in predetermined interest rates before June 1999.
After June 1999, as the interest rate on bank deposits had reached a low level, the China Insurance Regulatory Commission adjusted the upper limit of the predetermined interest rate for life insurance to no more than 25%。Since then, for 14 years, the upper limit of the predetermined interest rate of China's life insurance has not been adjusted, and it has continued to be in a "low interest rate period", whether it is an ordinary, dividend-paying or universal product.
Here you can recall that after China's accession to the WTO in 2001 until the development of China's economy in recent years, the investment environment is generally good, ordinary insurance products 2The predetermined interest rate of 5% is actually not competitive in the market, and participating insurance and universal insurance have become the mainstream products at that historical stage because they can share the operating profits of the insurance company, as shown in Figure 2, before 2013, the premium of participating insurance accounted for more than 80%.
But why did it decline so quickly in late 2013?
Because in August 2013, the regulator adjusted the predetermined interest rate of ordinary life insurance and annuity insurance to 4025%, thus entering the "era of high interest rates" of life insurance. Determine 25% + dividends for products, and determine the income of 4Compared with 025% of the products, the competitiveness of the market is greatly reduced, so the proportion of participating insurance premiums has decreased significantly.
As of today (July 31, 2023), 3The fixed income increase life product with a predetermined interest rate of 5% has withdrawn from the historical stage, and the predetermined interest rate is 30% instead. So, let's take a look at it again and determine the benefit 30% and 25% + dividends, which one is more competitive?
When the fixed income component is only 0At the time of the 5% difference, I think, there will definitely be more people willing to give up this 05% fixed income, thus exchanging the possibility of a better, higher return.
Does this mean that the era of dividend insurance is back!??
Fourth, what are the main indicators to look at when buying dividend insurance?
How to choose participating insurance?
What metrics to focus on?
I would like to give you two tips, the first one: the fulfillment ratio of dividends.
This indicator can be found on the official WeChat of various companies, and it is a very intuitive and very important indicator.
You can take a look at the following**, in fact, there are many factors that affect the fulfillment ratio of dividends, but for us ordinary people, it can be understood so simply.
Namely: 100% means doing what it says.
100% means excellent performance.
100% means there is still work to be done.
Second: the company's shareholder background and asset management strength.
If you want to have dividends, you must have good investment management capabilities, which in addition to ability, but also depends on the background of shareholders, because a sum of money is invested in the first place, and the resources of shareholders are very important.
Finally, I recommend a participating insurance that is very worth starting:
Zhongyi Life Insurance - Whole Life Insurance (Participating).