At present, more and more people are paying attention to insurance, which is worth encouraging. However, when buying insurance, many people still ask, which type of insurance is better? What should I pay attention to before buying?

So what exactly is participating insurance? Is it really that good? What else should I pay attention to? Next, the senior sister will take everyone to learn about it!

1. Is participating insurance really that good?

Participating insurance means that the surplus generated by the insurance company based on the actual operation of participating insurance business is distributed to each policyholder according to a certain proportion, usually based on cash dividends or incremental dividends. The cash dividend uses the method of distributing a sum of cash every year, while the incremental dividend refers to the distribution of dividends by increasing the insured amount. When encountering surrender, insurance accidents or expiration of the guarantee period, Only then can you receive the allocated dividends.

On the surface it looks good, but participating insurance usually has hidden pitfalls in these aspects:

1. Dividends are uncertain

Even if "participating insurance" According to the Actuarial Regulations, insurance companies must distribute no less than 70% of their distributable surplus to policyholders after the actuarial balance is determined each year.

But how much profit will be generated in a year and how much surplus can be distributed is ultimately decided by the insurance company. Assuming that the insurance company’s dividend business is operating very well, maybe we will receive some dividends. Assuming that the insurance company operates If you do not do well, you will not be able to receive dividends.

Moreover, the terms of many participating insurance policies clearly state that policy dividends are uncertain, so friends do not have to place high expectations on dividends.

2. Bundled sales

Dividend insurance is usually sold in bundles with some insurance types, such as accident insurance, critical illness insurance, medical insurance, etc., which makes friends mistakenly think that it is the same insurance. One insurance policy can provide all the protection, but in fact many of these bundled products have incomplete coverage and low compensation ratios, which means they are expensive and impractical. Friends, it is better to buy them separately for a more cost-effective way. The product.

Generally speaking, participating insurance is not a cost-effective insurance and is not recommended for everyone to choose.

2. In addition to participating insurance, what kind of financial insurance is worth buying?

Most people buy participating insurance in order to obtain further income. Compared with participating insurance, I recommend everyone to buy annuity insurance or increased whole life insurance.

Annuity insurance can be regarded as a lump sum of money that we invest in an insurance company in one lump sum or in installments. When the time agreed in the contract with the insurance company is up, from then on, we will be able to receive it every year or every month. The insurance company gets a sum of money. For example, if you unfortunately die during the policy period, the insurance company will still pay a large amount of compensation to your family.

Moreover, the income and collection time of annuity insurance are written in the contract and are fixed, and will not be affected by market development factors. Assuming that you choose lifelong pension annuity insurance, you can still receive it all the time. It will stop only after death and can provide us with stable cash flow.

If you want to buy an annuity insurance with high yield, you can check it out through this article:

"Ranking of the Top Ten Annuity Insurances" ▏Want to buy high-yield annuity insurance? Don’t miss these 10 styles! 》

Increased whole life insurance is a life insurance in which the insured amount increases year by year at a fixed interest rate, and the fixed interest rate will be clearly stipulated in the insurance contract. Future economic changes and interest rate declines will have no impact on it, and the assets reach For the purpose of maintaining and increasing value, the cash value grows very quickly, and the insurance reduction and policy loan methods can be used more flexibly to solve the problem of short-term capital turnover. If the policy is surrendered later, you can also get a very good cash value.

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"Newly released! Don’t miss the top five high-yield incremental whole life insurance products! 》

Whether it is viewed from the perspective of annuity insurance or incremental whole life insurance, both provide mandatory savings functions and financial management functions. Although stocks and funds are equipped with financial management functions, however, There are great risks. However, the income of annuity insurance and incremental whole life insurance are very stable and there is almost no risk. Especially the safety is higher than bank deposits, and the contract is protected by law.

Even if the insurance company goes bankrupt, our policies will still be valid. They will be directly transferred to other insurance companies, and the rights and interests of the policies will naturally not be affected.