China Life links new insurance measures to poverty prevention
Largest insurer cuts premium prices, increases payouts; urges peers to customize protection products
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.