China’s leading insurer Ping An Insurance released on Tuesday a 20-year medical insurance, which is the medical insurance policy with the longest maturity in China.
As long as the consumer buys the newly-released policy, he can get protection for 20 years in a row, even if the product suspends selling or the consumer makes settlement of claims.
During the 20-year period, the policy holder can claim a maximum 2 million yuan ($292,117) in settlement every year, which can cover up to 120 diseases. The maximum settlement of the 20-year policy tops at 8 million yuan. People up to age 55 can apply for the policy.
Li Hao, deputy general manager of Ping An Health Insurance Company of China Ltd, said most of the medical insurance policies that promise 1 million yuan of settlement only have a one-year maturity. The newly introduced medical insurance addresses consumers’ demand for health protection for a longer term.
The China Banking and Insurance Regulatory Commission said in an announcement released in early April that insurance companies are allowed to adjust a premium rate for their long-term medical insurance products. The first premium adjustment can be made three years after the product is sold, and the time span between two adjustments should be no less than one year.
According to the commission, adjusting the premium rate will help insurance companies avoid inflation in medical fees. Therefore, insurers will be more willing to develop long-term medical products.
The People’s Insurance Company (Group) of China and China Pacific Insurance (Group) Co Ltd released similar long-term medical insurance in late May and late August, respectively.
As the commission calculated, Chinese insurers’ made a total medical insurance premium income of 244.2 billion yuan in 2019, accounting for 34.6 percent of the total value of health insurance. The annual growth rate of the medical insurance sector was 32 percent last year, which was much faster than the industry average of 20 percent.