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What are the tactics of insurance companies?

Here is the number one pitfall in insurance.

High-premium, no-protection, low-yield, capital- and interest-guaranteed participating insurance.

There is a saying in the insurance circle: If you avoid participating insurance, you will avoid 90% of the pitfalls in China's insurance industry. This shows how deep the pit is.

Participating insurance with high premiums, no protection, low returns, guaranteed capital and interest can be called the deepest pit in participating insurance.

This insurance package comes in various forms, such as returning it when you retire, returning it every year when your child goes to school, returning it when your child starts a business as an adult, etc... The key words are always the same. There is no "guaranteed capital" or "return". What are the good critical illness insurance policies for children? Which ones are cost-effective? Which one is the most worth buying? Let’s take a look at the latest list! Ranking of the top 10 best-selling children's critical illness insurance in the country

Such a product looks beautiful, but when someone sells you a product with the keywords of "guaranteed capital" and "return", you have to be alert Someone is taking you into a deep hole. 1. Let’s talk about the past and present life of participating insurance - how pitfalls it has

When everyone comes into contact with insurance, especially when insurance salespeople in small cities sell insurance, the type of insurance they hear the most is participating insurance. Insurance (protection and financial management, the insurance company also pays dividends).

All kinds of hype, it’s like buying a contract with an insurance company and becoming a shareholder of the insurance company.

But after seeing the huge difference between the real income and the demonstration level, I felt so sad that I might refuse insurance in this life.

In fact, it is not surprising that the insurance industry is generally impetuous. In order to pursue business scale and survive, many insurance companies only teach salespeople how to market, and less and less teach basic insurance knowledge.

Many salespeople do not know their own insurance, let alone the majority of insurance newbies.

Participating insurance has always been the hardest hit area for misleading sales. Let me tell you a little bit about how participating insurance was born, and you will know why participating insurance is so confusing.

Dividend insurance was born in the context of the era of difficult interest rate losses. The original intention of its birth was that insurance companies were trying to find ways to make money to fill holes

In the 1990s, China was in a period of great inflation. , the bank's one-year deposit interest rate reaches more than 10%.

Insurance companies are both financial institutions. In order to survive, they have to compete with banks for private funds. Therefore, the predetermined interest rate of the product is infinitely close to the deposit interest rate.

What’s terrible is that banks can adjust deposit interest rates every year, while insurance companies follow the trend and set high predetermined interest rates which are fixed interest rates. Once the product is sold, this high interest rate will be maintained for life.

For example, a "big company" (it was still a small company back then) sold whole life insurance with a predetermined interest rate of as high as 8.8%. This can be simply understood as compound interest of 8.8% for your life. Think about it. Isn’t it so exciting?

Why do you feel so happy? It’s because you know that the current bank deposit interest rate for more than 3 years is only 2.75%. You will definitely feel that the insurance’s annual interest rate of 8.8% is not too cool, but the insurance company did not see the bank’s annual deposit interest rate of 10%. The deposit interest rate will drop to 2.75% in the future.

This is the biggest bug in the entire product. The design of this insurance product was a scumbag before the times changed.

However, judging from the investment return rate of insurance companies in recent years, it is far from reaching the 8.8% level.

This means that for every policy sold that year, the company was actually losing money continuously until the body parted forever.

China’s insurance industry, which was ignorant and reckless, suddenly ushered in a major policy change.

Starting in May 1996, the People's Bank of China has cut interest rates for eight consecutive years, with the one-year deposit interest rate falling from 10.98% to the freezing point of 1.98%.

In November 1998, the China Insurance Regulatory Commission was established to unify the supervision of the insurance market.

In June 1999, the China Insurance Regulatory Commission issued the "Emergency Notice on Adjusting the Predetermined Interest Rates of Life Insurance Policies" (Emergency Notice), requiring the predetermined interest rates to be uniformly lowered to 2.5%.

The so-called "interest spread loss" simply means that the return to customers is too high, exceeding the investment income of insurance funds, causing the insurance company to suffer huge losses.

The three major life insurance companies, China Life, Ping An, and Pacific Ocean, have all suffered huge interest rate losses

The policy changes so fast that insurance companies are suddenly confused:

On the one hand, with the huge losses, we have to find ways to make money to make up the hole;

On the other hand, in that era of rapid economic development, the predetermined interest rate of insurance was only 2.5%. Here I go, How to sell it? How to make money if it can't be sold? Every insurance company is worried.

As a result, the three brothers of investment insurance—investment-linked insurance (referred to as investment-linked insurance), participating insurance, and universal insurance—were born to make money and fill holes. Therefore, participating insurance is also the insurance recommended by various sales companies. Why, because it makes money. How is participating insurance cheated? The data proves it

Taiping Fulu Kangrui, non-participating critical illness insurance, has a fixed insurance amount of 1 million, and the annual premium is 23,100

Taiping Welfare Fund You, participating critical illness insurance, the basic insured amount is 1 million, it will grow every year, the annual premium is 41,600

Oh my god

Did you see clearly, the same The insured amount and the price of participating insurance are 1.8 times that of non-participating insurance, and the annual premium is 18,500 RMB. (The total *** paid more than 370,000 yuan in 20 years) 2. Let’s talk about the pitfalls of participating insurance - the past and present life of participating insurance with high premiums, no protection, low returns, guaranteed principal and interest

高 Premium, unprotected, low-yield, capital- and interest-guaranteed participating insurance is a product of the 2008 stock market crash.

The previous year was 2007, the craziest year for the stock market. Insurance companies sold a large amount of investment-linked insurance (investment-linked insurance). In 2008, A shares plummeted from 6124 points to 1600 points. These investment-linked insurances also caused huge losses to policyholders, and the public's confidence in insurance companies also disappeared.

In order to pursue performance, insurance companies design and launch this type of participating insurance, euphemistically called "catering with the market", and it really hits the soft spot of customers.

A closer look at the characteristics of this type of participating insurance will reveal why there is a long list of adjectives such as "high premium, no protection, low return":

First, for the middle class For a family, a premium of tens of thousands of yuan a year is definitely expensive and takes up a lot of financial resources. This is why the premium is so high;

The insurance period spans decades. If you want to get your money back in advance, you have to Lost a lot of principal!

Second, the premium is equal to the insured amount, which means there is no protection at all. Because the premium is high, the policyholder thinks that he has spent a lot of money and has sufficient protection, but he does not know that it is completely the opposite!

Third, the so-called policy income (including dividends and fixed returns) is actually calculated using financial cash flow analysis tools. The real return is lower than that of a one-year period, which is a low return.

After collecting large sums of premiums, insurance companies use various investment methods to obtain huge profits (such as raising the banner of Vanke), but this has nothing to do with the half cent of the policy holder.

To sum up in the above sentence, this type of participating insurance is a more profitable variant of participating insurance designed by insurance companies after the stock market crash. This type of participating insurance takes up a lot of financial resources and has no guarantee at all. It also leaves families They form the misunderstanding that they have bought a lot of insurance and the protection is sufficient.