7 years as an insurance broker and MDRT member
Original article No. 99
Picture: Huhu King Original
After a lifetime of liking, finally came a dividend insurance that can be played.
If you are ready to save, divert, save education or pension, you must not miss the Sino-British Life Fumanjia (dividend-paying) increase life.
Is there a pit in this product? Is it suitable for you? Can you buy it in your area? If you can't buy it, are there any other alternative products?
What is a dividend-paying increase life?
Before introducing the participating insurance of Fumanjia, I will once again introduce to you what is the dividend-paying increase life and whether it is suitable for you.
The dividend increase product model is: guaranteed predetermined interest rate of 2.5% + dividends.
If the future investment is done well and the profits are earned, the insurance company should distribute at least 70% of the distributable surplus to the policyholder, and the insurance company will keep 30% at most.
The fulfillment ratio of dividends will reach 100% according to the demonstration, and it will even exceed the original 3.5% increase in life products.
If the fulfillment ratio of dividends is 50%, it will also exceed the current 3% predetermined interest rate for increased life products.
If the future economy is not good, investment is poor (if even the investment of insurance companies is poor, we generally estimate that it will be even worse), and the worst-case scenario is also a predetermined interest rate of 2.5%;
The term "fulfillment ratio" will be explained in detail later.
Participating insurance, unlike ordinary increased life and other insurance products, requires more attention to the background and strength of the insurance company, asset management investment ability and company reputation behind the product.
If we need a certain return, then choose a fixed incremental life insurance, and if we want to get a higher income, then choose a participating incremental life.
In this article, I will dismantle Sino-British Life Happiness from five standards and seven points of attention.
There are five criteria for choosing participating insurance
1. Benefit presentation, reflecting the business objectives of the insurance company for the product;
2. Dividend fulfillment ratio, transcript of participating products of insurance companies;
3. Solvency, the official judgment of the operating level and stability of the insurance company;
4. The comprehensive investment rate of return represents the real investment ability of the insurance company and is the source of dividends;
5. Shareholder background, representing the strength and resource acquisition ability behind the insurance company.
Zhongying Fumanjia is the same as the favorite of life before March, and perfectly matches the above five standards.
I'll show you them one by one below.
1. Presentation of interests
Let's compare Fu Manjia with the previous king [Favorite in My Life], taking a 0-year-old girl as an example:
Note: Purple numbers are dominant items, and green numbers are the same
Summary:
(1) During the payment period, the cash value of the lifetime is higher, including the bonus part of the lifetime preferred 10-year-old return, and the 11-year-old repayment of Fumanjia;
(2) From the beginning of the return on investment, the current price of Fumanjia is higher (both the guaranteed part and the included bonus are), of which 16-19 years old, the implied dividend part in the life is slightly higher, but only 0.0001-0.0025% higher, which is negligible.
(3) The IRR (Internal Rate of Return) of Fu Manjia is higher, reaching 3% at 14 years old, 3.5% at 26 years old, 3.6% at 33 years old, 3.7% at 48 years old, and up to 3.78% at 78 years old.
Long-term performance, Fu Manjia surpassed the previous king's favorite in his life.
2. Dividend fulfillment ratio
The "cash value of dividends" shown in the above presentation table refers to the "fulfillment ratio of dividends" at 100%.
Let's take a look at what the fulfillment ratio of historical participating insurance products in China and the UK is.
Data source: Fulfillment Ratio Disclosure of Sino-British Life Participating Products - 2022
Since its establishment in 2003, Sino British Life Insurance has operated a total of 35 participating insurance products, with a dividend fulfillment ratio of 100% and a maximum of 133%.
All products have achieved a 100%+ fulfillment ratio, which is not a simple matter. If you are interested, you can go to the official website of an insurance company to check the fulfillment ratio of each company, and some insurance companies are really miserable.
3. Solvency
When buying insurance, especially participating insurance, solvency must be paid attention to.
It reflects the ability of the insurance company to settle claims.
According to the regulations of the former China Banking and Insurance Regulatory Commission, the indicators include the core solvency adequacy ratio, the comprehensive solvency adequacy ratio, and the comprehensive risk rating.
Through solvency, you can intuitively judge whether the company is reliable, and the following 3 core indicators, reaching the standard is qualified:
(1) Comprehensive solvency adequacy ratio≥ 100%;
(2) Core solvency adequacy ratio ≥ 50%;
(3) The overall risk rating ≥ B.
An insurance company must meet all three conditions in order to be considered solvency compliant.
Satisfying this data means that the insurance company has enough ability to make claims on your policy.
Under normal circumstances, the composite solvency adequacy ratio fluctuates between 120% and 250%, and the core solvency adequacy ratio fluctuates between 100% and 200%, and occasionally exceeds this range, which is normal.
If we want to find outstanding performance in this range, we can look at it in combination with risk ratings.
Data source: 13 actuaries collated
Sino British Life's recent consolidated solvency ratios and core solvency ratios are 273% and 167%, which are quite stable.
As a categorical regulatory assessment under the new C-ROSS II Regulations, Sino British Life has been rated AAA in the first, second and third quarters of 2023 (the latest announcement is the third quarter of 2023), and has been rated A in the comprehensive risk rating of the regulatory authorities for 29 consecutive quarters.
At present, there are only 6 life insurance companies rated AAA, which fully reflects the sound operation and management capabilities and good risk management level of Sino-British enterprises.
4. Comprehensive investment rate of return
The comprehensive investment rate of return can more completely show the financial investment situation of the insurance company in a period of time, which is relatively more complete and more real, so it is also called the real investment rate of return.
Data source: 13 actuaries collated
In the past three years, Sino-British Life Insurance ranked 4th in the ranking of investment returns of life insurance companies, with an average rate of return of 5.93%. This is the data for 2021-2023, and the economic situation in recent years should be very clear to everyone.
Data source: 13 actuaries collated
In the latest 2023, among non-listed insurance companies, China and the UK ranked second, and excellent investment ability is the basis for achieving excellent dividends.
5. Shareholder background
Founded on January 1, 2003 with a registered capital of RMB 2.95 billion, Sino-British Life Insurance is a Sino-foreign joint venture insurance company established by COFCO Capital and Aviva Group.
Founded in 1949, COFCO has been one of the world's top 500 companies for 26 consecutive years and ranked 87th among the world's top 500 companies in 2023.
COFCO holds 13 listed companies, and as a national strategic enterprise, it provides grain, oil and food for 1/4 of the world's population, and ranks as the world's largest grain import and export enterprise with its strong strength.
Aviva Group is the UK's largest provider of insurance services, the world's leading insurance group and Europe's leading provider of life insurance products and pensions, with over 300 years of professional insurance experience. Historical customers: British royalty, British prime minister, Kennedy, Newton, Titanic, etc.
China and the rest of the world will join forces, with the Chinese side ensuring localization, and the British side taking into account the experience and service.
Since its establishment 20 years ago, the shareholders of Zhongying have always been these two. The shareholders are simple and clean, the decision-making at the company level is easy, and there is no messy equity transfer.
The advantages and disadvantages of participating insurance should not only depend on the level of dividends shown in its forecast, but more importantly, the overall investment strength and operating conditions of the insurance company.
Together, these factors determine the insurer's ability to deliver on the promised dividends and ensure that policyholders' interests are maximized.
In terms of products, shareholder background and operating and investment capabilities, Sino-British participating insurance has given us great confidence.
A few more points to focus on
1. There are various ways to receive dividends
There are four ways to receive dividends in Fumanjia, cash collection, accumulated interest, payment of insurance premiums, and payment of increased amounts.
It is recommended to pay off the increase amount, as it is equivalent to putting the dividend income into the policy to continue to participate in the dividend, so as to get more income. (This is the form of the previous demo table.) ）
Of course, if you don't think about it, you can choose any one first, and you can change it later.
2. A second policyholder can be set up
It is recommended to add a second policyholder, especially if the parents insure their children, if not, once the policyholder dies, the money becomes the policyholder's inheritance, and all immediate family members share the inheritance.
By setting up the spouse as the second policyholder, he can become the policyholder in line and the policy will continue to be in force.
3. The insurance reduction method is relaxed
The function of reducing the policy of increased whole life is very important, and its function is to make the increased whole life more flexible, and the cash value can be withdrawn in whole or in part by reducing the policy.
Fumanjia's insurance reduction conditions: When the contract takes effect from the 5th year, you can apply for insurance reduction, and the annual cumulative reduction cannot exceed 20% of the basic sum insured at the time of insurance, nor can it be lower than the minimum amount stipulated in China and the UK.
It belongs to the most lenient category of insurance reduction at present.
4. Conversion of annuity rights
This is amazing, if you haven't figured out whether to buy a pension or increase your life. Then this product is a good choice.
After the age of 60, if you find that you have a gap in your pension and need to supplement some pensions, then transfer this money to an adult annuity. Of course, you can also take out the cash at one time by reducing or surrendering the policy, which is supported.
5. The minimum investment amount
The general requirements for Chinese and British products are relatively high, and Fumanjia is a customized product, so the minimum investment threshold is slightly higher, but the threshold is basically halved before June 30.
6. Sales area
Sino-British has branches in 18 provinces and cities including Guangdong, Beijing, Sichuan, Fujian, Shandong, Hunan, Hebei, Jiangsu, Xiamen, Liaoning, Hubei, Henan, Heilongjiang, Shanghai, Anhui, Jiangxi, Shaanxi, and Shenzhen.
7. Alternative products
If your province is unable to insure this participating insurance, we have other options, I have screened out 3 high-quality participating insurance, namely Jingfu Hongyun, Yuexiang Yingjia, Xingfujia, basically customers across the country can be covered.
These three products also have their own characteristics, and I will also make detailed reviews of these products in the future.
The reason why several high-quality participating insurances such as Fumanjia can be highly regarded in the participating insurance market is that they are highly regarded.
Mainly, it meets all the expectations of everyone for participating insurance.
Ensure high returns, stable dividend fulfillment ratio, reliable company, stable operation and good service.
It is important to note that it is important for participating products to accept the uncertainty of dividends.
I have prepared a full set of information for Zhongying Fu Manjia dividend-type increase life, and friends who need it can contact me to receive it. Of course, the information on the other three products is also ready.