Insurance 315 | Dividend Insurance on the Rise! Three Major Consumer Misconceptions Hidden Beneath the Prosperity

Special Topic: 2026 315 Financial Complaint Exposure Platform

【Global Network Finance Report by Feng Chaonan】 In today’s environment of normalized low interest rates, dividend insurance products represented by variable return insurance are gradually replacing traditional savings insurance, firmly occupying the mainstream market position.

For insurance companies, the “guaranteed return + floating dividend” structure of dividend insurance essentially transforms the single “interest spread loss” risk into a “non-guaranteed” risk shared with customers. This shift not only provides insurers with greater investment flexibility and tolerance for errors but also offers customers the opportunity to share potential excess returns.

From the consumer’s perspective, this return structure balances the dual needs of “safety and growth.” However, with a wide variety of dividend insurance products on the market, how to rationally select and avoid pitfalls has become a practical issue for consumers.

01__From Interest Spread Dilemma to Steady Growth_ How Can Dividend Insurance Solve Industry Challenges__?_

As market interest rates continue to decline and the profitability of equity markets faces significant risks, traditional fixed-income savings insurance products put insurers in a dilemma: high interest rates lead to interest spread risks that threaten solvency; low yields reduce competitiveness and hinder customer attraction, resulting in slow business growth.

In contrast, dividend savings insurance, with its “minimum guarantee + floating” return structure, combined with functions such as insurance protection, asset inheritance, and retirement planning, meets consumers’ needs for security and returns. It also alleviates operational risks for insurance companies.

“Thanks to the relatively low guaranteed return set, insurers can strengthen their fixed-income asset allocation while increasing investments in stocks, equities, real estate, infrastructure, and other long-term high-yield assets,” said Yang Zeyun, a professor at Beijing Union University Business School’s Department of Finance. When investment environments are favorable, insurers share excess returns with customers; when conditions are poor, they reduce dividend rates to ease pressure on themselves. This mechanism gives insurers resilience through economic cycles and is their “moat” for survival in a low-interest-rate era.

Additionally, a representative from Huatai Life told Global Network that the development of dividend insurance aligns with regulatory guidance for healthy, high-quality industry growth and meets consumers’ long-term wealth management demands for “fund safety, transparent returns, and long-term accumulation.”

Notably, recently, some non-listed insurers have launched dividend insurance products with a preset interest rate of 1.25%, breaking the industry standard of 1.75%.

Regarding this new industry trend, Yang Zeyun believes it signals three key points: first, the long-term interest rate expectations are declining; second, insurers are proactively loosening investment restrictions—lower guaranteed interest rates give insurers more room for error and increase the likelihood of investing in high-yield long-term assets; third, it promotes a shift from “rigid guaranteed returns” to “non-guaranteed floating returns.”

02__Rational Thinking Amid the Boom: Consumers Are Prone to Three Major Cognitive Biases

As major insurers actively develop dividend insurance products, the key for consumers is how to choose wisely.

Compared to traditional insurance products, dividend insurance is more complex in design, making it harder for consumers to understand and posing greater challenges for sales. Long-standing preferences for fixed returns make it a gradual process for customers to accept floating return products. More importantly, consumers are prone to three cognitive biases when allocating funds: mistaking “demonstration interest rate” for actual future yields; misunderstanding the “dividend realization rate”; and treating dividend savings insurance as a bank deposit.

Specifically, the policy benefit demonstration table for dividend insurance divides benefits into guaranteed and dividend parts. The guaranteed benefit is what the customer will definitely receive, while the dividend benefit is non-guaranteed and depends on the insurer’s investment performance. This visual presentation often leads consumers to mistakenly believe that the projected dividends are guaranteed, ignoring their variability and uncertainty.

Furthermore, many consumers use the dividend realization rate as a key reference indicator. The so-called dividend realization rate is the ratio of actual non-guaranteed dividends paid out in a year to the projected non-guaranteed dividends shown in the plan.

There is a critical logical relationship behind this: the higher the demonstration interest rate set, the lower the dividend realization rate at the same actual dividend level. Insurers often adopt relatively high demonstration interest rates to attract customers, but this makes achieving the projected dividends more difficult. Therefore, using the dividend realization rate alone as a product selection criterion is not accurate.

“Many consumers compare the yield of dividend insurance with bank deposits, especially since some dividend insurance is sold within bank outlets, leading many to mistakenly think that dividend insurance is as liquid as a bank deposit. In reality, current dividend savings insurance typically requires 5 to 10 years or more to withdraw without losing principal, and achieving the advertised higher yields may require 20 or even 30 years,” said Yang Zeyun.

Faced with complex market conditions and numerous cognitive biases, a representative from Huatai Life believes that over the past decade, the market has shifted from high to low interest rates and from pursuing high returns to emphasizing stability. Whether a dividend insurance product can succeed long-term depends on whether the company’s management philosophy truly centers on “long-termism.” For consumers, choosing dividend insurance is a “long-distance marathon,” and it is recommended to consider three aspects: first, the company’s stable operation and shareholder strength, which underpin long-term product fulfillment; second, the company’s historical dividend performance, to see if it consistently exceeds market averages; third, aligning the product with personal family needs, risk tolerance, and investment horizon.