3·15 Insurance Rights Protection: China Life Matches Consumer Needs with Suitability Management

In recent years, the insurance industry has been thriving, offering a variety of insurance products that provide diverse protection options for our lives. They play an important role as economic “shock absorbers” and social “stabilizers.” However, some consumers face issues when purchasing insurance, such as not knowing which product is best, where to buy, or how much premium is appropriate.

On the occasion of the “3.15” Financial Consumer Rights Protection Education and Promotion Campaign, the China Insurance Industry Association invited industry experts to educate the public about financial consumer protection, enhance risk prevention capabilities, promote lawful and rational rights protection, and strengthen consumers’ sense of gain, happiness, and security.

Xu Chongmiao, Chief Compliance Officer of China Life Insurance Co., Ltd. (hereinafter referred to as “China Life,” stock code: 601628.SH, 2628.HK), was invited to participate in the event. He discussed “suitability management” with consumers and how to use “suitability management” to purchase insurance products that truly fit their needs, making insurance a solid safeguard for a better life.

What is “suitability management”?

“Suitability management, at its core, means selling or providing suitable products through appropriate channels to suitable customers,” explained Xu Chongmiao.

The “Measures for the Management of Suitability of Financial Institution Products” (hereinafter referred to as “Measures”) issued by the China Banking and Insurance Regulatory Commission will be fully implemented from February 1, 2026. These measures incorporate insurance product suitability into unified standards, preventing mismatches, misguidance, and disputes from the source. This marks a milestone for the insurance industry in protecting consumer rights and establishing clear behavioral guidelines and rigid constraints. From the perspective of insurance consumption, this new regulation provides tangible protections for consumers in three ways:

First, clear product classification and open information disclosure. Clear classification helps consumers easily identify product features and make rational choices. The Measures require financial institutions to consider factors such as insurance type, coverage responsibilities, and whether policy benefits are certain when classifying and grading insurance products. For example, life insurance can be divided into life insurance, annuities, health insurance, and accident insurance based on coverage responsibilities; based on product design, it can be categorized as ordinary, dividend, universal, or investment-linked. Consumers can usually check and learn about specific classifications on insurance companies’ official websites.

Second, pre-insurance assessment and risk acknowledgment. Financial institutions must analyze consumer needs and financial capacity before selling insurance products with a term longer than one year. When selling investment-linked or other products that may lead to capital loss, they must also assess the consumer’s risk tolerance. If mismatched needs, insufficient financial capacity, or inadequate risk tolerance are identified, the institution will recommend discontinuing the purchase. If consumers insist on buying, they must sign a written acknowledgment confirming their voluntary decision and understanding of the risks.

Third, special care and protection for vulnerable groups. The Measures pay particular attention to seniors over 65, requiring financial institutions to exercise special caution when selling high-risk products to them. This includes establishing dedicated sales procedures, enhancing risk warnings, and providing more time for consideration. This reflects regulatory warmth and demonstrates human concern for elderly consumers.

How to implement suitability management for scientific insurance and rational consumption?

“Good systems require active cooperation from consumers. To achieve ‘suitability management,’ insurance consumers should focus on five key points,” Xu Chongmiao emphasized.

First, truthful disclosure and self-assessment. Before purchasing insurance, consumers are asked to fill out evaluation questionnaires. Some may hide true information or fill out forms carelessly to buy certain products, which is unacceptable. Consumers must provide accurate, complete personal information, including financial status and health conditions, so that financial institutions can recommend truly suitable products.

Second, clarify needs, avoid blindly following or comparing. Based on factors like family lifecycle, health, and debt levels, consumers should identify core protection needs, avoid impulsive decisions, and ensure coverage matches their actual requirements. For example, primary breadwinners should prioritize sufficient accident, life, and health insurance; retirees should focus on pension and long-term care planning.

Third, act within your means and adjust financial plans dynamically. Premium payments should align with household income and cash flow. The Measures specify that for products like dividend, universal, or investment-linked policies with uncertain benefits, the one-time premium should generally not exceed four times the annual household income, and annual premiums should not exceed 20% of annual household income, to avoid risking cash shortages due to high premiums.

Fourth, verify qualifications and carefully read policy terms. Purchase insurance through legitimate channels and qualified agents. The insurance contract is an important document for consumer rights; before signing, thoroughly review the “Insurance Application Tips,” “Risk Warning,” and “Product Terms,” paying close attention to coverage, exclusions, payment periods, cash value, and surrender rules. For products with uncertain benefits like dividend, universal, or investment-linked policies, pay special attention to risk warnings in benefit illustrations.

Fifth, stay calm and make good use of the “cooling-off” period. Most life insurance policies include a “free-look” period (usually 15 days), during which consumers can cancel the contract and get a full refund. After purchasing, especially for large or long-term policies, consumers should discuss with family and review whether the policy still fits their needs before keeping it.

Xu Chongmiao also offers tips for consumers:

First, insure rationally to match needs. Before purchasing, evaluate key factors such as age, occupation, income, health, and family responsibilities, clarify core protection needs, financial capacity, and risk tolerance. Avoid impulsive decisions or following trends blindly.

Second, stay calm and use official channels. If any doubts arise during the process, contact official customer service hotlines, apps, service outlets, or authorized agents.

Third, stay alert and beware of scams. Do not trust online messages claiming “full refunds,” “rights protection experts,” or “policy testing,” and do not disclose sensitive information like ID numbers, bank details, or policy data to avoid falling into scams involving “代理退保” (agent-led policy surrender) or other illegal activities.

“There’s no one-size-fits-all answer to insurance; only products that match your needs, financial situation, and risk tolerance can truly provide protection. Be rational, make careful decisions, and let’s work together to build a fair, transparent, and secure insurance consumption environment, ensuring every protection is just right and every trust is well-placed,” Xu Chongmiao urged.

Source: China Life