What's the scheduled interest rate?

The so-called predetermined interest rate refers to the annual rate of return assumed by the insurance company for the policy according to the company's forecast of the future capital utilization rate when pricing the product. Generally speaking, it is the rate of return provided by insurance companies to consumers, which is mainly set with reference to the bank deposit interest rate and the expected rate of return on investment. The upper limit of domestic life insurance interest rate is 2.5%, which was formulated in June of 1999. 13, 15 Since August, ordinary life insurance (guaranteed insurance) has implemented a new rate policy, and its scheduled interest rate no longer has an upper limit of 2.5%, but is determined by insurance companies according to the principle of prudence.

The predetermined interest rate is the interest rate used by life insurance products in calculating insurance premiums and liability reserves. Its essence is that life insurance operators promise to give customers a return in the form of annual compound interest because they occupy customers' funds. The predetermined interest rate is directly related to the price of insurance products.

The upper limit of domestic life insurance interest rate is 2.5%. The low predetermined interest rate increases the price of insurance products and reduces the attractiveness of insurance products to some extent.

The growth rate of traditional life insurance products is much lower than that of investment insurance products such as universal insurance and investment-linked insurance. According to industry insiders, this situation is not normal for a growing insurance market. The slow growth of traditional insurance means that people's security needs have not been met.

One of the reasons is that the predetermined interest rate of life insurance products is too low, which makes the price of insurance products too high. This makes the disadvantage of low predetermined interest rate of life insurance products more obvious. Although there are certain risks in the marketization of the predetermined interest rate, it is necessary for the long-term development of the industry.

When the predetermined interest rate is only 2.5%, the realization of marketization means that the interest rate will inevitably increase, which will make insurance products cheaper for consumers.