Introduction to the basics of insurance dividends What is the source of dividends
Nowadays, participating insurance has become one of the hot-selling products in the insurance market, and major insurance companies have also launched corresponding products. When it comes to participating insurance, we have to talk about insurance dividends, which are the driving force for people to buy participating insurance. So, what are the sources of insurance dividends?
Make an appointment with a professional consultant with one click, customize an exclusive life protection plan for free, save, pay, and protect in one step!
Participating insurance refers to an insurance company that, after the end of each fiscal year, distributes the distributable surplus of this type of participating insurance in the previous fiscal year to customers in a certain proportion, in the form of cash dividends or value-added dividends. insurance. Simply put, it is life insurance with a dividend function, which first appeared in the United Kingdom in 1776. According to the current statistics of the China Insurance Regulatory Commission, participating life insurance, participating pension insurance, participating endowment insurance, and other types of insurance with participating functions are all included in the scope of participating insurance.
Insurance dividends are derived from the distributable surplus generated by death spread, interest spread, and fee spread. The death margin benefit refers to the fact that the actual risk occurrence rate of the insurance company is lower than the expected risk occurrence rate, that is, The surplus generated when the actual number of deaths is less than the expected number of deaths; The surplus generated when the income is obtained; the fee difference profit refers to the generated when the actual operation and management expenses of an insurance company are lower than the expected operation and management expenses.
Because insurance companies need to consider three factors when determining the rate: the predetermined mortality rate, the predetermined return on investment, and the predetermined operation and management costs, and once the rate is determined, it cannot be changed at will. But life insurance policies are often covered for decades, and over such a long period, what happens may be different from what is expected. Once the actual situation is better than the expected situation, the above-mentioned difference will appear, and the insurance company will distribute the profit generated by this part of the difference to the customer according to a certain proportion, which is the source of the dividend.
The “dividend” source of participating insurance is mainly the “three difference” dividends. When the “death difference” of various insurance companies is similar, the source of dividends is mainly reflected in the “interest spread” and “fee difference”, and these “two differences” “How much is reflected in the company’s management and capital operation level.
Wisdom Tips: To sum up, it can be seen that the insurance dividend is the profit that the insurance company distributes to the customers according to a certain proportion of the profit from the interest margin, the death margin, and the fee margin. When purchasing participating insurance, citizens need to have an objective understanding of insurance dividends and understand their sources.