General Insurance

China retirement readiness falling: How to stay on track

China retirement readiness falling: How to stay on track

Retirement is something that needs to be on the minds of every adult, not just those who are nearing their golden years. In fact, planning ahead for three decades or greater is just what the doctor ordered when it comes to ensuring that your financial future is healthy and bright. However, for those in the Middle Kingdom, there has been bad news recently regarding China retirement readiness. Here, Pacific Prime China examines the news and its implications for future China retirees, as well as the areas you should focus on when considering your own personal retirement plans.

China retirement readiness falling

Tsinghua University has released an updated index on retirement readiness that shows China’s rating falling from 6.51 out of 10 in 2015 to 6.0 in 2016. Similarly, in 2015 20% of people reported that they felt they were well prepared for retirement, which dropped to 15.3% of people in 2016. This index takes many factors into account in order to come up with this number, including people’s retirement plans, preparations and expectations. Additional factors include current retirement savings, knowledge of financial issues and financial planning, and awareness of retirement responsibilities.

So what is the reason that China retirement readiness is taking a step backward? There are many factors contributing to this trend, but perhaps the biggest and most obvious general reason is that the Chinese economy and stock market have not been doing so well as of late. Cultural feelings about personal responsibility also seem to be a factor, as only 9% of Chinese citizens feel that retirement financing should fall solely on them. Neighboring territories in Asia, including South Korea, Singapore and Hong Kong, see this number come to 40% of their respective citizenries. Meanwhile, 63% of citizens believe that the onus of China retirement readiness should fall to the government. This number also sits at 40% in the other territories mentioned.

These feelings may be mirroring the current state of retirement savings in China, where the major vehicles for saving is a government run pension plan. However, there are also voluntary savings plans participated in by both employees and employers, as well as private savings plans and commercial retirement savings plans. The latter products are of negligible popularity in China at the moment, but the Chinese government is promoting such commercial savings vehicles to try to offset providing for an aging population.

Savings and investment

So how should one go about organizing their retirement savings? One of the best ways for people who already have a significant amount of savings is to invest their money. Utilizing capital to create capital is a great way to build up a nest egg and ensure that you can maintain a certain quality of living well into your golden years. Once you have your investments set, and factor in other sources of income like government subsidies for the elderly that you will be eligible, you can create a retirement budget and see if you will have enough money to achieve your desired lifestyle and China retirement readiness goals. Of course, you are going to want to have extra savings available each year so that you can address unexpected costs that arise.

Health insurance

Any retirement planning should start not only with an overview of your financial health, but also your physical health. After all, planning for the future is not strictly about dollars and cents, but also being healthy enough to enjoy your hard earned nest egg. For this reason, factoring in the cost of your future healthcare is important. Of course, one of the best ways to addressing these costs is to make sure that you have a comprehensive health insurance plan in place to avoid the costs that can come along with the major ailments that tend to occur more commonly later in life, such as cancer, stroke, heart disease, Parkinson’s disease, Alzheimer’s, etc.

When you are planning your medical insurance there are some common exclusions that come up time and again that you should be aware of. Namely, these are maximum age limits and pre-existing conditions.

Maximum age limits

Many insurers impose maximum age limits on their policies. This is because as people age, insurance underwriters have to consider if the medical costs of the average individual or a certain age will be greater than the premiums that the individual would pay the insurer. An insurance company cannot operate running on a loss, so they institute maximum age limits to avoid insuring the people that are most at risk of costly medical conditions. Generally this limit tops out at 70 years of age, although some plans go as high as 80. Still yet, there are plans available out there with no maximum age limit on them. As with health insurance at any age, though, the riskier a person is to insure, the higher their premiums are likely to be, so people of advanced age will likely have to pay a hefty cost to remain insured. This can make planning ahead for inflating insurance costs somewhat daunting.

Pre-existing conditions

Another risk factor that insurers are always on the look-out for is pre-existing conditions. This is simply when you have an ongoing medical condition that was present before you obtained your current health insurance policy. In most cases, where not prohibited by law, a private health insurance plan will exclude coverage for pre-existing conditions. This means that, while an insurance policy will provide benefits for many illnesses, the specific pre-existing conditions will not be eligible to be covered. Sometimes pre-existing conditions can be covered after the ailment in question has not occurred for a particular period of time – usually a number of years.

To ensure that you never get stuck with having excluded pre-existing conditions, you can simply obtain a policy with a particular insurer, and maintain continuous coverage for as long as possible. However, this can limit your choice of insurance provider. If you develop a condition while on an insurance plan, you will be disincentivized from switching providers, because a new insurer is likely to count the condition as pre-existing.

Life insurance

While it won’t necessarily help you enjoy your retirement, when it comes to planning for the end of your life, life insurance is a must to make sure that your family is well taken care of after your passing.

Other similar insurances to ask your insurance agent about that can help in dire circumstances include critical illness insurance, personal accident insurance, permanent disability insurance and accidental death and dismemberment insurance.

While we will leave the savings and investment to the financial advisers of the world, Pacific Prime China can certainly help those that need assistance in obtaining comprehensive insurance to address medical concerns, as well as avoid burdening their families with financial hardship following a hospitalization or death. Contact us today to be put in touch with a knowledgeable insurance advisor that can answer any questions you may have about China retirement readiness, and provide you with free insurance plan comparisons and price quotes. As a broker we compare prices from a number of the world’s best insurers; saving you the trouble of tracking down multiple quotes from multiple sources.

Posted by Travis Jones in General Insurance, News
Pacific Prime China is now on WeChat!

Pacific Prime China is now on WeChat!

Pacific Prime China is excited to announce the launch of our very own portal on popular Chinese messaging platform WeChat – a welcome new addition to our current repertoire of social media accounts already on Facebook, and LinkedIn. Joining an active user base of 846 million, the official Pacific Prime China WeChat account now offers a whole host of exciting new features exclusive to our followers. To avail these perks, simply follow us on WeChat (WeChat ID: PacificPrime) today!

Pacific Prime China meets Chinese market trends

In joining the ubiquitous WeChat platform, Pacific Prime China taps into a whole new audience of avid users – more than 90% of WeChat users go on the messaging app every day, and over 50% of users use WeChat more than 1 hour daily! By keeping up-to-date with the latest market trends in China, Pacific Prime China joins in with 560,000 other official company accounts on the most popular online community channel in China.

With a current active user base that is hiking its way up to the 1 billion user mark, WeChat has far surpassed Twitter’s 317 million users and is steadily catching up with Facebook’s 1.79 billion active users. Interestingly, corporate workers form the largest user group on WeChat, making up 40.4% of total users.

More than just a messaging platform

Pacific Prime China sees enormous potential in finding new ways of personalizing our services to existing and new clients on WeChat, especially when looking at the different ways that users are currently engaging with the platform. For example, not only are people communicating via chat, but they are also engaging on its social media platform “Moments” with friends and companies – a significant 61.4% of users go onto WeChat Moments when they open the app.

Another popular feature is WeChat Payment, which links WeChat with the user’s credit card. There are now 200 million users connected to WeChat Payments, and this highly availed feature has even seen over 8 billion “red envelopes” sent over WeChat during Chinese New Year in 2016!

Key features offered in new Pacific Prime China WeChat portal

Here are a key few of the many exciting new features that you can expect from the new Pacific Prime China WeChat portal:

  • Claims processing: Existing clients of Pacific Prime China can now access their policy details, easily process claims, and also change their policy information.
  • Assisting new clients: Our WeChat portal allows us to assist our new clients with regards to securing their new policies
  • Access to a dedicated service team: We now have a dedicated team servicing our WeChat account, helping you with any questions you may have.
  • Keeping you informed: Followers will be able to access exclusive blog articles so that they can stay up-to-date on the latest, most important market information relevant to the insurance industry, covering topics related to expat health insurance, general insurance, health trends, and many more.

Don’t forget to follow us!

To access the exciting new features now available on Pacific Prime China’s latest portal, be sure to follow us via our WeChat ID: PacificPrime, or by scanning the QR code below:

Pacific Prime China WeChat

 

Interested in learning more about our WeChat portal or the plans that we offer? Contact us today and our team of insurance advisors will be more than happy to have a chat.

Posted by Jess in General Insurance, News
Insurance options for kids going to school overseas

Insurance options for kids going to school overseas

If you are planning on sending your child overseas for education, you undoubtedly already know there are a number of things to consider. One such thing to consider is your child will need health insurance. Here, we take a look at the common solutions available to parents whose children will be traveling abroad.

 

Common insurance solutions for students studying abroad

When going abroad for work or study there are usually a number of health insurance solutions available for people to consider. Here is an overview of the 3 most common types of health insurance secured by students studying abroad.

Travel insurance

These plans are designed to provide emergency medical cover to people while they are outside of their own country. Generally speaking, most travel insurance plans are a set period in length, usually providing cover for either individual trips of up to a set number of days or numerous trips of a set length (usually less than 30-60 days) over one year.  

Travel insurance plans are popular for students studying abroad not only because they offer medical coverage but they also cover other travel related incidents such as flight delays, lost luggage, and even emergency medical evacuation back to your home country.

The one thing to be aware of with these plans is that they are not designed to provide elective medical care while overseas, rather they are designed for medical emergencies and provide just enough coverage to see you well enough to return to your home country. If you plan on going to the doctor while studying abroad, the visit likely will not be covered by this plan.

Health insurance from a local provider

Almost every country popular with students will offer some form of local insurance. These plans are designed to provide citizens and residents of these countries with adequate health insurance coverage in that country only.

Generally speaking, there are two types of local insurance available in most countries:

  • Local plan offered by a private insurer – These are plans designed and sold for and to local markets by insurers who have licenses to operate within that country.
  • Coverage provided by the government – These are plans or coverage offered by the local government.

As mentioned above, local health insurance plans are designed to provide adequate coverage for most residents. In most cases, people with these plans will be visiting the public health sector which in many countries is subsidized by the government. As such, you will usually find that these plans have relatively low levels of coverage, or have limits placed on the amount you can claim for care.    

It should also be noted here that while many countries have health care or health insurance sponsored by the government, there are usually strict requirements as to who is eligible for this type of care. A good example of this would be Singapore with their Medisave program. Permanent residents and citizens of Singapore pay a percentage of their monthly income into a savings account that can then be used to cover the cost of healthcare for themselves and their family.

This savings account is not available for foreigners, which means their children would also not be able to benefit from the offsetting. If they were to get sick, they would need to pay the full cost to see a doctor.

Another example of this would be in Canada where all citizens and many residents have access to provincial health care, and students are required to have health insurance. The issue is, in some provinces, foreigners are not eligible for provincial insurance. This means that you will need to secure a plan from a private insurer.  

Health insurance from an international provider

The other common option for students going abroad is an international health insurance plan. These plans, offered by the global or international branches of major insurers, provide worldwide coverage. In other words, your child will be covered in your home country, the country they study in, and any country they may visit while overseas.

International health insurance plans are also designed to offer high coverage limits which means you can visit nearly any medical center and receive quality health care. These plans are popular with many expat families and companies who send their employees overseas as they afford the policyholder the ability to visit top quality healthcare.

The main concern many people have with these plans is that they are considerably more expensive than local or travel coverage.

 

Does my child actually need insurance while studying abroad?

This can actually be a fairly tough question to find a concrete answer to. Some schools and countries will require a valid insurance plan to be secured in order for a visa to be issued while others will simply recommend it.

For example, if your child is going to the going to school in the US, it is mandatory for some student visa holders to secure health insurance coverage that meets ACA (Affordable Care Act) requirements within the US.

One of the best pieces of advice we can offer is that it would be a good idea to contact the university or school your child will be attending. The reason for this is that some schools will actually offer coverage as part of the school fees. This is particularly common for schools in the UK, Canada, Australia, and even some in the US. These plans are usually local cover only and are affordable, however they may not be available to some students or will often have fairly strict limits and rules attached to how the plan can be used.

And of course, in many cases, it would be advised to secure a health insurance plan for your child in case they get sick and need to visit a doctor.  

 

Which health insurance plans should I purchase for my child?

In Pacific Prime China’s experience, it would be advisable to secure both a travel insurance and an international health insurance plan. The reasoning behind this is that the travel insurance plan will cover your child while they are traveling between your home country and the country their school is located in. There is always a chance that their luggage could be lost, or there will be delays while traveling (especially during the winter in the northern hemisphere) and having coverage to help offset the additional costs these bring can be a big help.

When it comes to actually living in their new country, an international health insurance plan will help cover the costs of any care needed. This is especially important in countries like Hong Kong, Canada, the UK, and the US, where the cost of health care can be prohibitively expensive if you don’t have access to the government/public health subsidies. These plans will also cover your child when they are at home and can have additional coverage elements like dental, and vision added thereby allowing your child to visit a dentist while they are at home on break.

One of the major advantages an international health insurance plan offers for children studying overseas is the fact that they will usually have emergency evacuation coverage. This means that if your child gets sick while at school you may be able to get them moved back to their home country, or a location where relatives are who can help them recover.

If you are looking for a health insurance solution that will cover your child while they are overseas, contact Pacific Prime China today. Our experts will be happy to discuss your options and help you find a plan that meets your whole family’s needs.   

Posted by rmcbroom in Expat Health Insurance, General Insurance
Insurtech: The next big buzzword in insurance?

Insurtech: The next big buzzword in insurance?

You’ve probably heard of the word “insurtech” at some point, but what does it mean? This portmanteau of “insurance” and “technology” is a recent buzzword that describes how insurers are revolutionizing the insurance industry with disruptive technology to improve and grow their offerings. Since technology took central precedence in the Chinese government’s 2013 reforms, the insurtech sector continues to flourish, with sales that could reach over US $60 billion by 2018. This article highlights some of the major trends in insurtech and what this could mean for the future of insurance in China.

Are insurers utilizing technology?

There is little doubt that insurtech is nothing short of disruptive, but before we look into some popular examples of how the industry is leveraging technology it would first be a good idea to look into what exactly health insurers are doing and their view on technology.

Historically, health insurers have been a little slow to uptake technology but this is starting to change as we found in our Top International Private Medical Insurance Trends report released in early 2016. As we found in our report, health insurers are increasingly implementing three technological elements:

  • Portals
  • Mobile apps
  • Claims and plan data

It is clear that insurtech is certainly having an impact on the health insurance providers we work with, but there is still a long way to go in terms of catching up with other industries. Below are some interesting new insurtech elements that the industry is starting to look into leveraging.

Integrating wearable technology and health insurance

Wearable technology is huge in China, with over 9.5 million wearables sold between April and June 2016 alone. These Internet connected devices not only help you track your fitness and sleep patterns, etc., but they also gather large amounts of real-time data. This presents many new opportunities for insurers to adapt and create new offerings so that they are more personalized and flexible. Some insurance companies have even begun to offer discounts and other benefits to encourage people to share their wearable data.

Complementing underwriting data with wearables

Despite its growing popularity, the widespread adoption and integration of wearable devices by the insurance sector is still in its early days. However, essential data collected from these devices is increasingly being used to complement underwriting data.

For example, with a fitness tracker you can more easily identify what kind of lifestyle improvements you will likely need to make in order to adopt a more healthy lifestyle. If you’re committed to these lifestyle improvements, for example if you show that you have a good track record of exercising as well as having adequate sleep, this information could eventually be used to negotiate lower premiums, especially after a few years of solid results.

Tackling new risks with cyber insurance

According to China Daily Asia, China sees an astounding US $60 billion in cyber losses annually, with more than 8 million servers hijacked within the past 2 years. Cybercrime continues to dominate headlines in the country as hackers become increasingly sophisticated.

As such, a new type of insurance, named cyber insurance, has emerged to tackle these cyber risks. Cyber insurance protects policyholders from liabilities incurred as a result of private data being lost or leaked to the public, and also protects them from cyber attacks and hacks by arranging the funding needed to cover cybercrime losses.

The future of consumer cyber protection

Although this type of insurance tends to be more popular for organizations looking to protect their data, we predict that more homeowner’s insurance policies will include this type of coverage for consumer cyber protection. By offering security audits, insurers will be able to check whether or not sensitive data (e.g. banking details) stored in your computer and in your mobile devices are truly secure and hack-proof.

Other emerging forms of insurance

As the insurance sector continues to be influenced by technological innovation, new forms of insurance offering more personalized services are beginning to emerge. Chinese tech giants like Alibaba, WeChat, and Tencent have been quick to notice this trend as they continue to compete for market share in emerging forms of online insurance platforms.

With technology, insurance companies are also able to pinpoint opportunities to develop new types of insurance, some even capitalizing on protecting policyholders against social risks such as divorce. As providers begin to find new, more sophisticated ways of analyzing and gathering consumer data, we predict that services offered by providers will continue to be more flexible and tailored to the individual.

To learn more about your insurance options, visit Pacific Prime China today.

Posted by Jess in General Insurance
Critical illness insurance in China

Critical illness insurance in China

When it comes to the economy and wealth in China, the rise in the past 20 years has been nothing short of meteoric. The sheer number of people who have pulled themselves, or been pulled out of poverty and into the middle class has grown exponentially and is forecasted to do so in the impending future. This growth has spurred an increase in demand for nearly all things from tangible products like cars and phones to intangible products like critical illness insurance.

 

In fact, a recent report by the Boston Consulting Group has predicted that the demand for private critical illness insurance in China is set to increase nearly sevenfold in the next five years. The report found that in 2015 the value of critical illness insurance premiums was 169 billion RMB. This is expected to increase to 700 billion in 2020. In short, critical illness insurance in China will continue to be big business for insurers. In order to capture this business, you are likely going to see an increase in advertising from insurers for new policies. Like all other products in China, some policies will be fantastic, while others will be far short of this. The question is, how can we find the best critical illness plan for our coverage needs?

 

First, define critical illness

While many seasoned expats and professionals will be aware of what it is, there is increasing evidence that many younger professionals are unsure of what critical illness insurance is and whether they will need it. To that end, we should first define this type of insurance before looking into securing the best plan on the market.

 

Simply put, critical illness insurance is an insurance policy that is designed to pay out when a person is diagnosed with a critical or life-threatening illness that you have a chance of recovering from. This is different from strictly terminal illness cover, which only pays out when you have a terminal disease.

 

The majority of plans created in China pay out in a lump-sum at a predetermined time e.g., 14 days after diagnosis or surgery. Other plans offer a kind of income that is paid out in installments over a set period of time once a diagnosis has been made. In China, and in much of the world, these plans are sold usually as riders on life insurance plans, meaning if you purchase a life insurance plan, you can also add on critical illness insurance.    

 

The key to note here is that almost all critical illness plans will have a set list of conditions or illnesses they will pay out for. These will vary by insurer, but all plans will cover at least:

 

  • Cancer
  • Heart attack
  • Stroke
  • Coronary artery bypass surgery

 

While the money paid out by these insurance plans can be used for anything, it is most commonly used to cover:

 

  • Medical costs associated with the listed condition.
  • Costs associated to recovery from the condition.
  • Funeral costs should the covered die.
  • Lost income.
  • Payment of mortgage or outstanding bills.
  • Living costs of surviving family members.

Do I need critical illness insurance?

In truth, not every person out there will need critical illness insurance. For example, if you live in a country where retirement benefits, healthcare, and welfare are well ingrained and sound, then the chances of needing this type of insurance are considerably lower. The same can be said for people who receive cover through their company that they deem to be acceptable.

 

That said, this is not the case for the vast majority of people in China. This is especially true for people who don’t have a large amount of savings, are single earners, or can’t afford to take the time off of work to recover. Essentially, if you can’t afford the hospital bills and living costs now, should a serious disease or ailment strike you, then it would probably be a good idea to consider critical illness insurance.

 

5 tips on how to find the best critical illness plan

Here are our top 5 tips on how you can find the best critical illness plan

 

1. Always look at the conditions covered

This is extremely important, as insurers will usually have different lists of the conditions this type of insurance covers. As we noted above, they will all cover at least cancer, stroke, heart attack, and coronary artery bypass surgery, but after that, the lists will be different.

 

While it is impossible to predict what diseases we may get, or whether we will get sick at all, it would be beneficial to compare lists and look for some of the more common ailments. Ideally, you should look for a plan that covers a variety of illnesses.

 

2. Be aware that some cancers will not be covered

While cancer is always covered by these plans, it is important to note here that some cancers will be excluded especially if there are high recovery rates associated with cancer. For example, early stage melanoma will not usually be covered largely because the recovery rates are near 100%.

 

The key here is that cancer will need to be critical, some insurers will assess cancer cases on a case-by-case basis in order to determine whether they will pay out on a claim.

 

3. Check that total & permanent disability is included

This will increase premiums associated with critical illness coverage, as the chances of an insurer paying out on these types of claims will be higher. The thing is, while this is riskier for the insurer, it is riskier for you to not have this coverage. If you are maimed in a traffic accident your earning potential will likely drop, which can have an impact not only on your life but also on your family as well. Investing a little extra on the premium can go a long way in preventing future problems.

 

4. Don’t select on price alone

Like many things in China, the price, or premium, on these plans will be drastically different. In our experience cheaper plans often have lower payouts and much stricter coverage limits and requirements. While these plans may be perfect for some people, they could be a bit of a risk for others.  

 

We strongly recommend looking for a plan that balances coverage elements, clearly defined payouts, and an agreeable premium.

 

5. Discuss your options with Pacific Prime

Finally, if you are considering securing a critical illness plan, it would be a good idea to talk with the insurance team at Pacific Prime China. We can help you determine your coverage needs and then identify and evaluate a number of possible plans that will work for your. We can also help ensure that you get the best coverage from a reputable insurer.

 

Contact us today to learn more.

Posted by rmcbroom in General Insurance