Multiple products increase prices simultaneously; the term life insurance industry may usher in a new era of pricing

Source: Economic Information Daily Author: Xiang Jiaying

The insurance market is experiencing a significant wave of “price fluctuations.” Journalists have noticed that since March 1, many popular term life insurance products on various online platforms have quietly updated their “price tags.” On the Ant Insurance platform, both “National Coverage · Term Life Insurance” and “Zhen Ai · Term Life Insurance” have completed their replacement of old with new products. The newly launched products are generally priced about 7% higher than before. For example, for a 30-year-old male insured for 1 million yuan over 20 years, the annual premium has increased from 1,268 yuan to about 1,359 yuan after the price hike. This translates to less than 8 yuan more per month, which seems small but breaks a long-standing price stalemate for this type of insurance.

This is not an isolated case. According to multiple insurance brokerage firms, several main products, including Huagai Life’s “Huagai Damai 2026,” Guofu Life’s “Guofu Dinghai Pillar No. 7,” and Zhongyi Life’s “Zhongyi Qingtian Pillar No. 11,” will be delisted or adjusted in price within this month, with an expected overall increase of 5% to 10%. The low-cost term life insurance, long used as an “attracting traffic” tool in internet insurance, is undergoing an industry-wide reassessment of its value.

Tax and Actuarial Double Pressure

For consumers accustomed to “high leverage, low premiums,” the price increase may seem sudden. However, industry insiders see this as a natural return to market rationality.

“The most direct reason is the adjustment of tax policies,” said Long Ge, Deputy Director of the Innovation and Risk Management Research Center at the University of International Business and Economics. According to the latest VAT preferential policies released in January 2026, personal insurance with a term of over one year that is exempt from VAT is explicitly defined as life insurance, annuities, and health insurance that “return principal and interest.” This means that pure protection, non-returning term life insurance at maturity, no longer enjoys tax exemption. Calculations show that this additional approximately 6% tax burden directly pushes up the final premium by 5% to 10%.

In addition to the explicit increase in tax costs, the underlying logic of product pricing is quietly changing. Although the “2025 Chinese Personal Insurance Experience Life Table,” implemented from 2026, indicates an increase in life expectancy, the reality is more complex.

A product development manager from a large life insurance company also told reporters that for middle-aged and young high-coverage groups, insurers are becoming more conservative in assessing death risks, which directly raises risk premiums.

Furthermore, rising claims pressure makes it difficult for insurers to maintain previous low-price strategies. Industry insiders reveal that the claim rate for term life insurance has been rising over the past two years. “Term life insurance is a high-leverage product; a single claim often requires thousands of premiums to balance,” said an actuarial expert. “As the number of claims increases, the ‘balance’ in pricing must tilt in the other direction.”

Market Shifting Toward Quality Competition

This price adjustment marks the accelerating end of the wild growth era of low-cost internet term life insurance.

In recent years, due to its straightforward responsibility, simple terms, and easy comparison, term life insurance has become a “front-runner” for insurance companies to seize market share through online channels. To attract attention and traffic, some insurers have adopted aggressive pricing strategies, even offering rates below risk costs to scale up, leading to frequent “floor prices.” However, this model is no longer sustainable under current economic and regulatory environments.

“Now, competition is shifting from price-driven to value-driven,” said an industry insider. The recent rate hikes reflect insurers’ efforts to balance accurate pricing with operational rationality. Chen Hui, Director of the China Actuarial Technology Laboratory at Central University of Finance and Economics, also believes this adjustment demonstrates more precise pricing and more rational management by insurers. The industry’s competitive logic is shifting from simple price comparison to refined risk pricing.

This transformation is also reflected in the upgrading of product responsibilities. In the future, competition in term life insurance will focus less on a single rate figure and more on optimizing coverage responsibilities and enhancing service experience. For example, additional payouts for specific diseases, closer integration with family risk scenarios, and more efficient underwriting and claims services could become new focus areas for insurers. After all, when price wars become unsustainable, making products more “valuable” is key to retaining consumers.

It is worth noting that although there is a general increase in prices for term life insurance, industry experts believe this will not trigger a nationwide price hike. The China Insurance Industry Association’s study on the guaranteed interest rate of ordinary personal insurance products in January 2023 shows a value of 1.89%, still above the current on-sale products’ guaranteed interest rate of 2.0%, leaving a safety margin and not reaching the threshold for adjustment. Zhongtai Securities’ research report also suggests that if market interest rates remain stable, the probability of widespread premium increases due to a downward adjustment of guaranteed interest rates within the year is low.

How Should Consumers Respond?

Faced with the price hikes and the “sale suspension anxiety” created by agents on social media, how should consumers respond?

“Consumer demand is the fundamental starting point for purchasing products, and insurance is no exception,” industry experts remind consumers to beware of the risks of “stirring up sale suspensions.” While price increases are real, consumers need not panic or buy insurance beyond their needs due to this.

For families already planning to purchase such products, now is indeed a critical window. The core value of term life insurance is “protection”—using relatively small current expenditures to lock in high coverage for future uncertainties. Especially for family breadwinners burdened with mortgages, car loans, and responsible for children and elderly parents, term life insurance remains the most cost-effective leverage tool.

What should consumers pay attention to when choosing? The product development manager offered four tips: First, determine the coverage amount, generally covering family debts, children’s education, and parental support, typically between 1 million and 3 million yuan; second, choose the coverage period, prioritizing coverage until mortgage repayment or children reaching adulthood, usually until age 60 or 70, without blindly pursuing lifelong coverage; third, pay attention to exclusion clauses and health disclosures—fewer and broader clauses are better, as they directly affect future claims; finally, under similar coverage, select products with more favorable premiums and more reliable claims services.

Ju Junsheng, Postdoctoral Fellow in Applied Economics at Peking University, believes that even with rate increases, term life insurance remains one of the most efficient products in the insurance system. For example, a 32-year-old male insuring 2 million yuan until age 60, after the price increase, pays about 1,682 yuan annually, with a coverage leverage ratio still exceeding 59 times. In the “age of price hikes,” price should not be the sole decision factor; underwriting rules, exclusion clauses, and alignment with family responsibility cycles may be more important than a few dozen yuan in premium differences.

This adjustment, driven by tax reforms, actuarial assumption revisions, and changes in market competition logic, may mark the beginning of a more mature Chinese term life insurance market. When the tide recedes, what remains will no longer be “traffic players” relying on low prices to attract attention, but long-term advocates capable of enduring cycles and providing solid risk protection for countless families.

(Edited by: Wen Jing)