Editorial: Many people value investment insurance policies that combine insurance and investment characteristics, and choose to use this as a tool for retirement financial management. However, according to statistics, this type of insurance is also one of the most debated financial products. Especially for middle and high-age people, you should be careful that the risk of the insurance policy will increase with age. Once a investment fails, the policy will not only fail to make money, but will also become a bottomless pit for the guarantee. What are the pros and cons of investment insurance? Which ethnic groups are suitable for?

Investment insurance policy has both the protection of insurance and the benefits of investment, which is very cost-effective? Be careful of investment failure, not only will you not make money, but you will have to pay the increased security every year to avoid the insurance policy being invalid. If you pay your wife, you will lose your troops!

According to the statistics of the CSRC, benefiting from recent U.S. and Taiwan Stock Exchange Indexes, the increase in financial markets, and the increase in public investment intentions, in January 2021 alone, the cover of investment insurance policy increased by 113.6% compared with the same period last year. It can be said that this is one of the most popular income insurance products after the savings bank has been suspended.

However, the Financial Consumption Review Center for Financial Corporate Financial Consumption Review pointed out that in past complaints, the most common reason for the dispute is that the operator did not fully explain the commodity information to consumers, especially investment-based and derivatives. In the past, people in their 70s and 80s did not understand and listened to the investment insurance policy, and then regretted the fact that they were worried about it. In order to meet this kind of dispute, the Financial Control Commission stipulates that starting from September 2020, insurance companies over 65 years old must record audio and video when purchasing investment insurance to ensure the rights of consumers.

How to avoid investment insurance policies becoming bottomless pits for money? "50+" visits Li Xuewen, a financial expert who has a insurance business license, to understand what the investment insurance policy is, the pros and cons, and you shouldn't buy it.

Investment insurance is divided into three types: careful insurance insurance insurance, the longer the longer the insurance is, the more it will be.

Li Xuewen pointed out that from the perspective of the nature of insurance, the investment insurance on the market can be roughly divided into three types: variable insurance, variable insurance, and variable annuity insurance. Investment links may be stocks, mutual funds, bonds, foreign currencies, etc., which are very diverse.

She observed that many people think that investment insurance is "insurance plus investment" and cannot understand why investment failures affect the net value of the insurance policy. In fact, in terms of its essence, investment insurance is insurance. The difference between it and traditional insurance policies is that the insurance company operates investment after the insurance company pays the insurance premium. When an insurance company has an accident, the insurance company will use the investment income as part of the funding. Regardless of the investment performance, the insurance amount is the same.

However, investment insurance policies are chosen by the insurance company. When investment fails, the value of the insurance policy will decrease and the payments the insurance policy can get will also decrease. Insurance companies must take the risk of their own investment, and insurance companies will not guarantee profits or make payments.

She specifically reminds that it is best to consider it carefully for insurance customers over 50 to buy a financial investment insurance policy. Because the insurance premium is calculated based on the "Experience Life Table". The older you get, the higher the “risk protection” rate you pay. For example, a 60-year-old man insured a 1 million dollar insurance premium is currently 1.27.422 yuan per million yuan, and he has to pay a 10,000 yuan annual premium. The longer you live, the more you gain.

The point is that this guarantee will be deducted from the insurance account. If the investment performance in that year is poor and the remaining amount in the account is less than 10,000 yuan, the guarantee must be paid in a guarantee of nearly 8,000 yuan in order to maintain this guarantee of 1 million yuan. If you don't continue to make money, the guarantee will be invalid and you will not be able to obtain the originally desired amount of money even if you die.

"The investment-type insurance policy is more suitable for young people with low risk insurance and small investment budgets, rather than middle-aged people over 50 years old." Li Xuewen said. She has seen many insurance companies over 70 years old, and because the risk insurance has increased sharply, they have to pay high insurance almost every year. She suggested that if she really couldn't take action, it would be better to endure the contract, which would be better than to be too tough.

Another type of investment insurance policy with variable annuity is basically the same as that of traditional annuity. After deducting the relevant continuous fees such as commissions, management costs, etc. of the guarantee, it is the principal of the investment. If the investment makes a profit, the insurance company can return the annuity in installments after the annuity payment start date. For middle-aged people, it is a tool for cumulative pensions. However, the insurance company still needs to consider investment costs, risks, and expected investment returns, and evaluate which investment tool is most beneficial to them.

What are the benefits of investment insurance? These three types of people are suitable for buying

Although investment insurance policies may not be suitable for everyone, Li Xuewen pointed out that compared to other investment products, it still has several advantages.

First, the options for investment insurance policy are divided into two types. First, the "Class-wide" guarantee is held by experts and selected investment standards. A commission fee will be deducted every year, usually about 1.7% of the account value. Another option is the one selected by the insurance company. Taking investment funds as an example, the advantage of investment insurance is that the cost of conversion tags is lower, and you can change them 4 to 6 times a year for free. Unlike ordinary mutual funds that require continuous fees to apply for or return, frequent transactions will take a lot of profits.

Furthermore, for investors with lower budgets, investment insurance is a lower entry option. For example, if you buy domestic mutual funds regularly and a fixed amount, the monthly investment amount is at least 3,000 yuan, and the overseas funds are at least 5,000 yuan. If you use an investment insurance policy, you can invest at least 10 funds with a monthly guaranteed investment of RMB 2,000..

In addition, from the perspective of tax payment, every year when applying for taxes, the guaranteed fee will enjoy a deduction of RMB 24,000 and the capital gains of the investment insurance policy, and there is no need to be certified tax. In addition, unless the national tax bureaus believe that they deliberately conceal or falsely report doubts during the period of serious illness or the last two years of their lifetime, generally speaking, insurance payments are not usually included in the personal income tax.

The most important thing is that to return to the basics of insurance, the payment of death toll of the sacrificial disease is what other investment tools lack. Insurance companies who have insurance against a change of insurance or a change of insurance can obtain compensation when they die or die in full. However, it should be noted that the investment type insurance type is divided into two types: Type A and Type B. The amount of the type A is "insurance and the unit value, whichever is higher", and Type B is "insurance plus the unit value", so you must pay attention to it in advance when purchasing the insurance.

What kind of investment insurance is suitable for people? Li Xuewen believes that the following three situations can be considered:

1. A young and small-scale group who only has one cash but also needs insurance and wants to invest in it. When buying a warranty, it is best to choose products with low manual fees and can be admitted to medical insurance. The calculation method of the insurance policy should be at least the "Fifth Round Life Table" announced in 2012, with a lower rate.

2. People who are very familiar with fund investment and who will change investment tags multiple times within a year

This group of people also needs to pay attention to the manual fees of the guarantee and choose as many times as possible to convert the tags for free.

3. People who have retirement plans but are not good at managing financial investments

This group of people can choose the "Class-wide" guarantee that is run by experts, but it is best to first calculate the actual expected return rate after deducting the agency fees and other handling fees.

In addition, some insurance policies focus on words such as "monthly interest payment" or "high interest payment" to attract consumers to buy. But Li Xuewen reminds that in the era of low interest rates, unreasonable high interest rates are likely to come from the insurance premiums paid by the insurance company. She has also seen that many people regard monthly interest allocation as additional income, which can easily spend money at will, and over time, they will not be able to save money. Only by not choosing monthly interest payments before formal retirement can you force your savings and ensure the accumulation of pensions.

Really suitable for post-50s financial planning to increase investment rates before retirement and reduce risks after retirement

Want to have a financially independent life, how should you choose financial products? Li Xuewen suggested that two major points should be mastered. Before retirement, you can use tools with higher investment returns, such as stocks, mutual funds, ETFs, variable annuities, etc. to accumulate assets as much as possible. Because I am still working at this time, I have a certain amount of risk tolerance and financial decisions can be more promising.

After retirement, you should reduce risks and ensure a fixed monthly cash flow. She recommends that you can make good use of the spot annuity, and first "lock" the pension, and then get it back monthly after the annuity is started. Although the interest rate is not high, it is still better than fixed deposits and there is no need to worry about the risk of substantial losses.

In addition, in the insurance part, she recommends that medical and long-term care insurance be preferred. If you are worried that the insurance premium for purchasing a medical insurance after the age of 50 is too high, you can choose to pay for medical insurance or medical insurance for major diseases, which will have a slightly lower insurance policy for end-type medical insurance.

She also reminded that you must do your homework before buying any financial products, and do not just listen to the recommendations of professional managers or insurance professionals. After all, there are a lot of products that the business sells every day, and what they recommend may not be the one that suits you the most. Only by considering your own money can you make the best choice for your financial plan for your old age!

Original text: Be careful the longer you live, the more expensive you will be! Financial experts: Understand the pros and cons of investment insurance policies, it is only cost-effective to buy retirement financial products