Six in 10 Chinese citizens have reservations about buying life insurance policies, a survey has found. The proportion of active buyers has also remained low, it said.
The survey results, released last week by Rong360, an online finance platform, indicated that many respondents were distrustful of the insurance companies’ honesty and credibility, leading to their cold reception of insurance products.
The study also added that complicated policies, low Chinese household income, and lack of information are the top three obstacles to purchasing insurance.
Almost 14% of respondents have seen their insurance policies become invalidated as the policyholders didn’t completely understand how premium payments worked. Another 36.7% failed to receive their payout due to confusion about compensation clauses.
Meanwhile, 44% were convinced to buy wealth management products from insurers, but they were not able to receive the expected returns upon maturity. Around 23% missed the opportunity to cancel a policy they didn’t like because the agent did not inform them about the cooling-off period, during which policyholders can opt out of an insurance policy if they don’t like its terms or had second thoughts.
“Insurance contracts play on words and are unreadable,” Shanghai resident Li Qinghuang told ECNS. “It’s easy to buy (an insurance policy), but it can be as hard as climbing up to the sky to claim compensation later on,” he added.
Liu Yinping, an analyst for Rong360, said that unprofessionalism and profiteering of some companies and insurance workers was hurting the industry’s reputation and abused consumers’ rights and interests.
Liu also noted that 46.36% of women, compared to 36.09% of men, had bought life insurance policies. He attributed this to Chinese culture, where women were more often in charge of household finances. Unemployed women also sought protection, as they are not covered by the social security program. As they are unemployed, they also have more time to learn about insurance.
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