China Life links new in­sur­ance mea­sures to poverty preven­tion

Largest in­surer cuts pre­mium prices, in­creases pay­outs; urges peers to cus­tom­ize pro­tec­tion prod­ucts

China Daily (Hong Kong) - - BUSINESS - By ZHANG YU zhangyu1@chi­nadaily.com.cn

China Life In­sur­ance Co, the coun­try’s largest in­surer, said it would in­ten­sify ef­forts to pro­vide com­pre­hen­sive pro­tec­tion for peo­ple against se­ri­ous ill­nesses, a move to help peo­ple avert poverty.

“We are cut­ting pay­ments (of in­sur­ance pre­mi­ums), while in­creas­ing the sum of com­pen­sa­tion for the in­sured in the event of crit­i­cal dis­eases,” Xu Haifeng, vice-pres­i­dent of the State-owned com­pany, said at a me­dia con­fer­ence on Tues­day.

In­sur­ance of this kind was rolled out in 2012 na­tion­wide by the State Coun­cil, in co­op­er­a­tion with in­sur­ance com­pa­nies, to help peo­ple avoid poverty due to se­ri­ous ill­ness.

In China, the main cause for poverty is of­ten se­ri­ous ill­ness that en­tails huge health­care ex­penses, if the per­son con­cerned is not in­sured.

To over­come the prob­lem, lo­cal gov­ern­ments pay pre­mi­ums to in­sur­ance com­pa­nies on be­half of poor pol­i­cy­hold­ers.

The in­sur­ance pol­icy, mainly im­ple­mented by 16 in­sur­ance com­pa­nies, has cov­ered 1.05 bil­lion peo- ple in 31 provinces, mu­nic­i­pal­i­ties and au­ton­o­mous re­gions as of Septem­ber, al­most 80 per­cent of China’s to­tal pop­u­la­tion, ac­cord­ing to the China In­sur­ance Reg­u­la­tory Com­mis­sion.

Ac­count­ing for 40 per­cent of the mar­ket share, China Life has paid 22 bil­lion yuan ($3.2 bil­lion) in claim set­tle­ments to more than 4 mil­lion peo­ple who had suf­fered se­ri­ous ill­nesses since 2012.

Though the cov­er­age is huge, the prac­tice of in­sur­ance for se­ri­ous dis­eases is still at an ini­tial stage, with­out uni­fied man­age­ment and stan­dard for the whole coun­try, said Xu.

He said since gov­ern­ments of dif­fer­ent re­gions have var­ied fi­nan­cial sit­u­a­tions, the in­surer would pro- vide pre­mium pay­ment op­tions at dif­fer­ent lev­els.

Other in­sur­ance com­pa­nies should also cus­tom­ize prod­ucts to suit lo­cal con­di­tions, adopt­ing dif­fer­ent com­pen­sa­tion stan­dards, he said.

Ac­cord­ing to Xu, the com­pen­sa­tion rate for al­ready-poor peo­ple and young dis­abled peo­ple in some places has been raised from the stan­dard 60 per­cent to 90 per­cent. Some don’t have an up­per limit at all.

“We are not count­ing on the prod­ucts to make money, but see­ing them as a re­spon­si­bil­ity to help al­le­vi­ate poverty and pre­vent more peo­ple from be­com­ing poor,” Xu said, ad­ding that the com­pany could just keep the prod­uct’s in­come and ex­pen­di­ture in bal­ance.

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