Factors such as taxes and payout rates are "putting pressure" on the market, leading to the suspension of several internet-term life insurance products. New product premiums have increased by approximately 7%.

Ask AI · How do adjustments in tax policy specifically affect the rise in premiums for term life insurance?

(Image from: Visual China)

Blue Whale News, March 19 (Reporter Shi Yu) Term life insurance products are entering the countdown for switching, with several popular internet term life products set to be discontinued in late March, and a new round of product rate increases generally anchored at 7%. Blue Whale News reporters conducted surveys and discussions with institutions and found that behind this are multiple factors, including adjustments in tax policy, changes in payout rates, and reductions in preset interest rates.

A frontline salesperson reported to the journalist that the expectation of price increases is prompting some hesitant customers to place orders more quickly, but due to the relatively limited increase, the overall impact on the market is not significant. Industry insiders warn that although rates are slightly increased, term life insurance, as a high-leverage protection tool, has not weakened its core risk hedging value.

Countdown to product switch, general increase of 7%

The current product switch for term life insurance is nearing its end. Journalists learned through insurance brokerage channels that at 0:00 on March 21, the Huaguo Barley 2026 term life insurance (internet exclusive) and the Sweet Home 2026 term life insurance (internet exclusive) will officially stop selling. On the evening of March 31, Guofu Life’s Dinghaizhu No. 7 term life insurance (internet) and Zhongyi Life’s Qingtianzhu No. 11 term life insurance (lifetime version) will also be discontinued.

Term life insurance refers to life insurance where the payment of insurance benefits is contingent upon the death of the insured, with a fixed term of insurance. If the insured dies during the agreed period, the insurance company pays the insurance benefit according to the agreed insurance amount. If the insurance term expires and the insured is still alive, the insurance contract naturally terminates, and the insurance company no longer bears the insurance responsibility, nor does it refund the insurance premium.

The concentrated delisting of term life insurance is actually paving the way for product updates and iterations. It is understood that the newly listed products will see some degree of premium increases.

From the products that have completed the switch, on March 10, the new version of Tongfang Global’s “Zhenai 2026” internet term life insurance went on sale, while on March 1, the old version of the same product was just discontinued. Under the same gender, coverage period, payment term, and coverage amount, the premium of the new product increased by 7%.

Meanwhile, the general manager of a branch of an insurance brokerage company, Ma Haicheng, informed the reporter that, based on his understanding, the soon-to-be-discontinued products such as Huaguo Barley and Guofu Life’s Dinghaizhu are also expected to see an increase of 7%.

Previously, an internet insurance sales platform promoted that two of its term life insurance products were delisted at the end of February, and the new products starting in March would see price increases exceeding 7%.

Price increases driven by changes in tax policy and worsening payout rates

What are the reasons behind this collective price increase?

“The explanation given by insurance institutions is ‘worsening payouts’ and ‘impact of tax policy’,” Ma Haicheng mentioned to the reporter.

Specifically, on one hand, starting from January 1, 2026, the “China Life Insurance Industry Experience Life Table (2025)” will be officially implemented. Although the new life table reflects an extension of average life expectancy, the payout rates for the middle-aged and young groups under high-pressure environments have not decreased, becoming a key variable for pricing adjustments.

“The actuarial pricing of insurance companies is not mechanically applying life table data. Actuaries combine historical experiences and trend forecasts, introducing experience adjustment factors based on the life table. Although average life expectancy is on the rise, from past payout data, the actual mortality rate may be higher than the expectations when insurance companies set prices. This is one of the reasons for the pricing adjustments of related products,” senior insurance actuary Xu Yuchen analyzed to the reporter.

On the other hand, adjustments in tax policy have become another triggering factor for this pricing change. Yang Fan, general manager of Beijing Paipai Insurance Agency Co., Ltd., explained to the reporter that the new VAT policy in 2026 clearly excludes “non-refundable” term life insurance from the tax exemption range, and the newly added 6% tax burden is difficult to deduct due to the simple product form, directly increasing premiums by 5% to 10%.

Another insurance institution in Shanghai confirmed to the reporter that their term life products have been adjusted in price, “mainly affected by tax policy.” They also stated that according to relevant regulatory requirements and market development needs, the company has completed the price adjustment of term life insurance products and will continue to focus on research and product innovation in various application scenarios for this category.

Yang Fan also pointed out that the dual squeeze of decreasing preset interest rates and declining investment returns is a core driving factor for the price increase in this round of term life products. “The fourth life table shows an extended life expectancy, which theoretically means a delay in the payout time for term life insurance with death as the payment condition, helping to reduce the pure risk premium cost. However, in the current pricing environment, the price increase effect brought by the reduction in preset interest rates significantly outweighs the price reduction benefits from improved mortality rates. Therefore, the update of the life table mainly serves to cushion the increase in prices; without the narrowing of risk exposure from the extended life expectancy, the price increase for this round of term life insurance could actually be higher.”

Discontinuation boosts short-term transaction volume

How is the market responding to the price adjustments? Multiple insurance brokers reported to the journalist that, on one hand, it has a stimulating effect on the market in the short term, and the discontinuation news has led many hesitant customers to decide to place orders, “Consumers accept reality much faster than salespeople,” one insurance broker expressed.

In terms of the adjustment range, Ma Haicheng told the reporter that due to the low premium base of term life insurance itself (annual payments are mostly around two thousand yuan) and high leverage, the slight price increase is not very noticeable in practical perception. Most customers would hardly feel it without prompting.

By reviewing price trends, Xu Yuchen provided a historical reference for this pricing adjustment: following the high pricing period from 2014 to 2015, the industry experienced an average annual decline of over 10% between 2015 and 2019; in the last five years, prices have stabilized. In contrast, the current increase is just a narrow fluctuation and has not broken the long-term trend of price stability.

Many industry insiders also remind consumers not to let price increases affect their insurance allocation decisions.

“Even after the price increase, term life insurance remains a high-leverage, cost-effective risk transfer tool in the financial market, and its core value has not been weakened by the slight adjustment in rates,” Yang Fan cautioned, “For families, the irreplaceability of term life insurance lies in its pure protection attribute: it can build a solid firewall for the economic pillar of the family at an extremely low financial cost, ensuring that in the event of extreme risks leading to permanent income interruption, rigid expenses such as mortgage and car loans, children’s education, and parents’ support are not affected. This precise hedging function against ‘premature death risk’ is a necessity that no other financial or insurance product can replace.”