Prioritize protection-only insurance and distinguish guaranteed benefits from projected dividends
Policy dividends are not guaranteed. Chinese disclosure rules require bold notice that future dividends are uncertain. Extra premiums for savings or return features put money under the insurer's management, often with limited access; check which amounts are contractual and which merely projected.
What it takes
Protection-only policies do not return premiums at expiry, which can feel like wasted money. Savings must be arranged separately; accepting that the premium buys protection is the challenge.
What you may gain
Chinese disclosure rules effective from 2023 require participating-policy illustrations to state prominently that future dividends are nonguaranteed and uncertain. The illustrated interest spread is capped at 4.5% minus the product's pricing interest rate. The source describes additional premiums for return-of-premium and participating products as insurer-managed savings, with uncertain returns and poor liquidity.
Context & considerations
Forced periodic saving can have real value for people otherwise unable to save. The recommendation targets people who can manage savings independently. Whether buying protection and investing the difference beats a savings-linked policy depends on the products; no systematic comparison is cited. This is not investment advice.
Research & references
China Banking and Insurance Regulatory Commission (2022). Information Disclosure Rules for Personal Insurance Products Longer Than One Year, document No. 24. https://www.gov.cn/zhengce/zhengceku/2023-01/04/content_5735014.htm