Compensation for personal insurance

According to the provisions of China's Insurance Law, compensation is used in the property insurance contract and payment of insurance benefits is used in the personal insurance contract. Of course, property insurance itself is a kind of loss compensation insurance. After the insurance accident, the insurer can only determine the amount of insurance to be paid on the basis of fixed loss, and the compensation method of determining the insurance premium afterwards is applicable. It is appropriate to use "compensation". However, life insurance can generally be divided into three categories: life insurance, accident insurance and health insurance, which have their own characteristics. Not all of them are fixed-rate insurance, and all of them are applicable to the compensation method of determining the insurance amount in advance. Many personal insurances, such as medical expense insurance, can only be determined after the end of treatment, that is, after the insurance accident. Therefore, like property insurance, it should belong to loss compensation insurance, and the external compensation method of determining the insurance amount afterwards should be applied. It is inaccurate to use the general expression of "paying insurance money" in the Insurance Law. It is this inaccurate statement that has led many people to mistakenly think that a major difference between personal insurance and property insurance is that the former applies compensation and the latter does not. Some people even think that the principle of compensation should not be applied to life insurance because "the person is priceless". In fact, as mentioned above, economic compensation is the fundamental purpose and function of insurance, and the different payment methods of insurance benefits should not affect this attribute of insurance. The compensation method of determining the insured amount in advance is applicable to some types of personal insurance, which is determined by the characteristics of these types of insurance. The so-called "priceless person" is actually a misunderstanding of human value. We know that although the person is indeed priceless from the perspective of human nature, in the market economy, the value of the person as the economic subject can be measured, especially when the person is insured as the subject, why can the economic value of a specific person be evaluated through his ability to create wealth and can be quantified through a series of indicators? In insurance practice, the insurer evaluates the value of the insured by investigating its living conditions, so as to further determine whether it can be insured or within what scope. Generally speaking, insurers will never accept high life insurance from a person with low ability to create wealth. In addition, for personal insurance, an important reason why insurers stipulate the maximum insurance limit of an insured unit of the same type of insurance in the insurance rules is to avoid the insurance amount exceeding the personal value of the insured, thus inducing moral hazard.

therefore, although the compensation method of personal insurance is different from that of property insurance in the Insurance Law, it does not mean that the Insurance Law denies the compensation nature of personal insurance, nor does it mean that the Insurance Law necessarily requires that all personal insurance must be compensated by determining the insurance amount in advance, that is, fixed payment. Both parties can choose the corresponding compensation method according to the characteristics of insurance. Specifically, for life insurance or some personal insurances that require fixed payment, it is possible to determine the insurance amount in advance because the losses caused by insurance accidents can be predicted at the time of insurance, and for these personal insurances, the compensation method of determining the insurance amount in advance has become an industry habit. The form of determining the amount of insurance in advance should be applied. However, for some insurances that cannot determine the insurance amount in advance, but can only determine the insurance amount through the evaluation of the loss degree after the insurance accident, such as the expense compensation insurance or accidental medical insurance in health insurance, the compensation method of determining the insurance amount afterwards should be applied.

of course, for some life insurance with fixed payment, because the insurance period is generally long, the ability of the insured to create wealth, the economic situation of the whole society, consumption level and medical expenses may change in the process, which may lead to a certain deviation between the insurance amount determined at the initial stage of insurance and the actual loss value when the insurance accident occurs. Therefore, relatively speaking, the compensation of fixed payment life insurance is not as clear and specific as that of loss compensation life insurance. Moreover, in the case of poor business environment and poor cooperation in the same industry, it is inevitable that the final compensation amount will be higher than the actual loss due to double insurance and double payment. But generally speaking, this is only a problem of insurance business environment and business technology, which can be gradually overcome through the improvement of business environment and business technology, and has nothing to do with the compensation nature of life insurance itself.