Starting from July, the maximum cap on demo interest rates will be reduced, and the marketing side of dividend insurance once again brings back a “countdown.”

June 30 is approaching, and the "scare selling" of participating insurance is making a comeback.

"The same amount of money, deposited two days later, could mean losing the equivalent of a car." Recently, similar promotional messages have become common in insurance marketers' "social media circles." A Beijing Business Today reporter has been receiving recommendation messages from employees of an insurance agency, with detailed plans comparing expected returns under different payment methods, creating an atmosphere of anxiety that "missing out means loss." Overall, compared to the round of "scare selling" in April, this marketing "offensive" is more intensive, not only playing the "last chance to board" card but also simulating various insurance scenarios to amplify consumers' sense of urgency.

In the context of continuously declining interest rates and frequent market fluctuations, participating insurance, with its "guaranteed + dividend" feature, has become a mainstream product in the life insurance market. However, with the cap on illustrated interest rates being lowered, will consumers' actual returns really "shrink"? Faced with the overwhelming "countdown" marketing from the sales side, should consumers hurry to "get on board"?

A Numbers Game or Real Shrinkage

"After June 30, the illustrated interest rate for participating insurance may be adjusted, with the maximum expected 3.5% potentially dropping directly to 2.9%. For the same 1 million yuan, long-term expected returns could decrease by about 350k yuan." Similar messages with specific numerical comparisons have been pushed to the Beijing Business Today reporter's social platform chat windows.

An employee of the aforementioned insurance agency prepared two insurance plans. Plan A: 100k yuan × 5 years, expected 1.3445 million yuan, long-term expected 3.46%, minimum annual investment of 10k yuan, to be removed at the end of June; Plan B: 250k yuan × 2 years, starting from the fifth year, receive 40k yuan annually, long-term expected 6%+, minimum annual investment of 250k yuan.

"The same amount of money, deposited two days later, could really lose 30% (a car)." "The numbers are right here, many clients have been inquiring recently, afraid you might miss out..." According to recent "friendly reminders" sent to the Beijing Business Today reporter, the content is highly similar, all pointing to the time node of June 30.

"Final countdown! After June 30, participating insurance returns will be 170k yuan less. Hurry to check out these 4 limited edition products." "Why you must configure participating insurance before June 30!" "The truth about the June 30 'rate cut' of participating insurance: not that returns are decreasing, but that regulation is ending 'pie-in-the-sky' sales." "The truth about the June 30 participating insurance rate cut: don't be swept away by the 'last train.'" The Beijing Business Today reporter noted that as June 30 approaches, similar promotional messages are flooding insurance sales social media circles. Unlike some rational analysis content, some salespeople not only play the anxiety card of "last chance to board" but also simulate various insurance scenarios, calculating long-term return differences under different illustrated rates, trying to amplify the psychological impact of "missing out means loss."

So, does a reduction in the illustrated interest rate mean consumers' actual money will really decrease? This is probably the most urgent misconception that needs to be clarified. To answer these questions, we must first return to the policy itself. Previously, the life insurance industry reached a consensus to lower the cap on illustrated interest rates for participating insurance from 3.9% to 3.5%. Products with illustrated rates higher than 3.5% must undergo change filing or be discontinued before June 30 this year.

From the product side, the core of this adjustment is the "illustrated interest rate," not the "guaranteed return." Li Chao, an insurance lawyer at Beijing Shaohe Mingdi Law Firm, said in an interview with a Beijing Business Today reporter that the core of this product adjustment is the "illustrated interest rate," not the "guaranteed return." Starting July 1, the cap on illustrated interest rates for newly filed participating insurance products will be uniformly reduced from 3.9% to 3.5%. Existing products with illustrated rates higher than 3.5% must undergo change filing or be discontinued before June 30. A few products on the market still showing a 4.25% illustrated rate will also be phased out simultaneously.

Both Market and Consumers Need to Return to Rationality

Clearly, for consumers, a lower illustrated rate does not necessarily mean a reduction in actual policy benefits. "The guaranteed predetermined interest rate written into the contract has not been adjusted this time. Only the uncertain dividend portion in actuarial assumptions has changed, essentially appropriately lowering the long-term inflated expectations on the sales side." Li Chao pointed out the key point.

This means that when faced with improper marketing such as "discontinuation" of insurance, consumers should remain calm and avoid being misled by inaccurate information into making impulsive purchases. Insurance products should be purchased based on actual protection needs and long-term financial planning, not blindly following "discontinuation" hype. Li Chao said that in the face of concentrated sales pitches at the end of the month, consumers should clarify the boundary between "illustrated rates" and "guaranteed rates" and avoid irrational insurance purchases due to "countdown" marketing.

After clarifying the personal impact, let's zoom out to the entire market landscape. To what extent will this adjustment disrupt premium flows and the industry's competitive ecology? Li Chao believes that from a market perspective, short-term premium volumes are expected to be released intensively before June 30, then decline in the third quarter. Some customer sources may flow back to ordinary-type increasing whole life insurance and annuities with a predetermined rate of 2.0%. In the medium to long term, as illustrated returns return to reasonableness, insurance companies will no longer need to maintain scale through irrational high-dividend competition. The industry will have more room for surplus smoothing, and the competitive focus will shift from a mere "numbers game" to real investment management capabilities and service quality. Although this adjustment only touches upon paper numbers, it actually strengthens the industry's risk control foundation. However, whether this opportunity can be used to cure the deeply entrenched "scare selling" dependency remains a major test of regulatory wisdom and market maturity.

If the above analysis dissects the "tactics" and psychological games on the sales side, then stepping outside specific sales pitches and performance mechanisms, observing from a broader perspective of industry transformation requires systematic thinking from the dimensions of institutional change and industry evolution.

Jiang Han, a senior researcher at the Pangoal Institution, believes that, first, from the product pricing mechanism, this adjustment marks a comprehensive transformation of participating insurance toward a "low guarantee + high floating" model. Essentially, it is a recalibration of expectations for floating returns on products, requiring insurers to be more stable in asset allocation strategies to prevent potential interest rate spread risks. Second, in terms of product structure and compliance, regulators are using tools such as "negative lists" to precisely correct deviations. This not only halts the illegal sales of some high-interest products in "scare selling" but also restricts health insurance and other types from being transformed into "arbitrage channels" for wealth management products, strengthening the policy direction of insurance returning to its original protection function. Finally, from the perspective of market competition, this change forces insurers to abandon the extensive competition that relied on "high interest deposits" and "pie-in-the-sky" promotions, shifting core competitiveness to actual investment return rates, dividend realization rates, and long-term asset-liability matching capabilities, promoting high-quality development in the industry.

Creating "Last Train" Anxiety Needs to Be "Braked"

Always, at specific time nodes, a new wave of insurance sales booms is triggered. Meanwhile, from the lowering of predetermined interest rates to the compression of illustrated rates, "scare selling" has also become a cyclical phenomenon.

The "scare selling" of insurance products has always been a focus of regulatory attention. Some insurance companies have been fined for this, and some local regulatory authorities have pointed out that individual insurance sales personnel, using the time window of product discontinuation, hype the "last chance to buy," exploiting information asymmetry and consumers' fear of missing out, inducing hasty purchases of insurance products, leading to consumer complaints and disputes. Common tactics include: hyping "discontinuation" and "last train"; confusing insurance products with wealth management products; and confusing "guaranteed" and "illustrated" returns.

So why is "scare selling" repeatedly prohibited? What industry dilemma does this phenomenon reflect? Li Chao believes that this phenomenon reflects the current transformation dilemma of the insurance industry deeply embedded in a low-interest-rate cycle. Under the backdrop of product homogenization, industry competition is forced to be limited to a single dimension of "illustrated numbers" and "time windows." Regulatory window guidance aimed at preventing interest rate spread risks is often transformed on the implementation end into a "free calendar" for sales tactics, triggering a "last train" marketing frenzy at every rate adjustment node. Root causes include: at the macro level, continuously declining market interest rates force regulatory tightening of the cap, providing natural nodes for the sales side; performance mechanisms heavily tied to short-term results make agents inclined to conflate "illustrated return shrinkage" with "actual return shrinkage," using information asymmetry to peddle anxiety; and the low guarantee and opaque floating returns of participating insurance force consumers to rely solely on plan sheet numbers for decision-making.

Jiang Han also stated that, first, the "scare selling" phenomenon profoundly reflects the long-standing information asymmetry between supply and demand in the insurance market and consumers' irrational expectations. Some sales ends use "limited-time stimulus" to create "last train" anxiety, essentially a marketing game exploiting information asymmetry, attempting to overdraw consumers' purchasing power by exaggerating returns. Second, from an institutional and mechanism perspective, the frequency of this phenomenon stems from the lack of smooth transition in past insurance product pricing mechanisms. In a downward interest rate cycle, without the buffer of a dynamic adjustment mechanism, insurers are prone to engage in "involution" competition to capture market share, thus giving rise to rush marketing. Finally, from the deep logic of industry transformation, with the establishment of a dynamic adjustment mechanism for predetermined rates and regulators breaking "implicit guarantees," such short-sighted behaviors of relying on "scare selling" to boost premiums are no longer sustainable. It not only depletes the industry's long-term credit but also reflects the growing pains and path dependence of insurers transforming from a "scale-oriented" to a "value-oriented" model.

When the countdown to June 30 reaches zero, illustrated rates will change accordingly. But more worth pondering than the numerical change is when the insurance industry can truly bid farewell to "pie-in-the-sky" marketing and enter a new stage of winning trust through real investment capabilities and service quality, behind this cyclical marketing frenzy. "In the future, insurers must retain customers by improving real investment levels and customer service capabilities, and consumers should also learn to focus on underlying assets and long-term dividend realization rates, rather than blindly chasing short-term yield gimmicks," Jiang Han said.

Beijing Business Today reporter Hu Yongxin

(Editor: Qian Xiaorui)

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