This type of insurance has become very popular recently. A girl from Hangzhou went straight to the bank with her year-end bonus.
Interest rate locked, compound interest for life
But the closure period is 5 to 10 years
Insiders: Suitable for people with long-term savings plans
Reporter Xu Yiwen
"I pay 20,000 yuan every year for a total of 5 years. The predetermined interest rate is 3.0%, which is higher than bank savings." 32-year-old Hu Xiaowan works for a large Internet company in Hangzhou. She received a year-end bonus two years ago and bought it for herself. An incremental whole life insurance product.
Aunt Li, 61, purchased a one-time life insurance policy of 100,000 yuan from the bank two years ago and saved it for three years.
In January this year, she took another 30,000 yuan to the bank to buy an additional insurance policy.
As interest rates continue to fall, both young white-collar workers and retirees are thinking about the same thing: how to preserve the value of their money?
The reporter noticed that both insurance agents and bank clerks in their circle of friends have recently been actively promoting a product-increased whole life insurance.
As a savings insurance product, many investors believe that it can lock in interest rates, provide stable income, and does not require cumbersome investment procedures, making it suitable for forced savings.
But is incremental whole life insurance really an ideal financial tool?
What are its advantages and disadvantages?
Who is it suitable for?
This type of insurance has become very popular recently. A girl from Hangzhou went straight to the bank with her year-end bonus.
Interest rate locked, compound interest for life
But the closure period is 5 to 10 years
Insiders: Suitable for people with long-term savings plans
Investment losses for consecutive years
Savings insurance attracts renewed attention
Hu Xiaowan decided to forcefully save for himself only after he stumbled out of the stock market.
Starting in 2021, she successively invested 200,000 yuan in stocks in new energy, medical, liquor and other industries, and lost more than 50% in two years.
After reluctantly clearing her inventory, she deposited the remaining money into Yu'E Bao.
The company issued another year-end bonus two years ago. After comparing multiple channels, she finally chose the incremental whole life insurance from a certain bank. "The downward trend in interest rates is the trend. I saved this money mainly to lock in the interest rate and obtain safe returns." .”
"Recently, added whole life insurance is the most popular. If you have some spare money, we recommend buying this product." When the reporter asked a bank business manager about savings insurance, the other party said that the recommended product has the greatest benefits. The income is fixed. "The insured amount increases annually at a compound interest rate of 3.0% of the basic insured amount. Its income is written into the contract, which can lock in the rate of return for the next few decades and is not affected by market fluctuations."
Since September 2022, the listed interest rates of bank deposits, which have been "quiet" for nearly 7 years, have begun to "fall and fall."
The interest rate of time deposits with certain maturities fell by 50BP (basis point). In the past 2023, major state-owned banks conducted a total of three rounds of interest rate cuts.
For ordinary people, it has become increasingly difficult to maintain and increase the value of wealth. As a result, more and more people are turning their attention to incremental whole life insurance.
The reporter noticed that there are two main types of savings insurance on the market: annuities and incremental whole life insurance.
"Compared with other savings insurance products, incremental whole life insurance products are simpler and more flexible. In addition to having a certain proportion of death value leverage, customers value more the cash value, that is, income. Customers can adjust the amount based on their own needs. Depending on the economic situation, you can choose one-time payment, installment payment, etc. As long as the closed period is over and the income exceeds the principal, you can realize income and lock in the interest rate." Du Feng, an insurance broker who has been practicing for more than 10 years, told reporters.
Controversies continue between the channel side and the consumer side
Inadequate understanding of product characteristics is the main reason
Although incremental whole life insurance has these advantages of locked-in income and lifelong compound interest, its reputation on major social platforms is not satisfactory.
The reporter entered the keywords "increased whole life" on a social platform, and the homepage displayed "Dissuade people from quitting, it is a big scam to increase their life expectancy", "Lessons learned from the pitfalls, and I will suffer a big loss by following the trend and buying an increased life insurance". It’s such a trap”…
Why is it regarded as a financial management tool to maintain capital and increase value on the channel side, causing such controversy?
"Most of the consumers who feel cheated did not fully understand the product features before purchasing insurance, or the sales staff did not understand the customer's financial situation and plans and recommended inappropriate products." said the bank account manager.
Du Feng also told reporters that it is not recommended to buy this type of product for those who will have large expenditures in the short term, pursue short-term ultra-high returns, and do not have good basic protection.
He has repeatedly emphasized that consumers should fully understand the product before making a choice.
an expert:
Suitable for people with long-term savings plans
"People with experience in the investment field know how to avoid risks. Each financial product has different characteristics. The core of incremental whole life insurance is the cash value, which is the money you can get back when the policy is surrendered. But it generally requires 5 -With a 10-year closed period, if the policy is surrendered in a short time, it will cause great losses." Du Feng told reporters that the longer the extended whole life insurance is held, the higher the cash value.
It is reported that increased whole life insurance is suitable for individuals or families with medium and long-term savings and inheritance planning. For example, if you want to make retirement plans for yourself and education plans for your children in advance, increased whole life insurance can provide good financial protection.
Before considering purchasing incremental whole life insurance products, consumers need to ensure that: first, they already have enough protection insurance, such as accident insurance, medical insurance, life insurance and critical illness insurance; second, they are pursuing stable income and have a sum of money on hand Funds that are not needed for a long period of time.
"It is recommended that customers use various product combinations to plan for each life stage." Du Feng said.