Reason: The premium rate of simple life insurance is slightly higher than that of ordinary life insurance. The main reasons are: high mortality rate without medical examination; Trivial business adds extra management fees; The failure rate is high, increasing the insurance cost.

What is simple life insurance?

Simple life insurance refers to life insurance operated by simple methods. It is a small amount of insurance with no physical burden to meet the needs of ordinary low-wage workers. Simple life insurance has a short payment period, limited coverage and no need for physical examination.

What are the characteristics of simple life insurance?

The basic content of simple life insurance is similar to that of ordinary life insurance, and its particularity lies in:

(1) insurance varieties.

Usually, whole life insurance or endowment assurance with limited payment time is the main variety, and simple life insurance generally belongs to non-dividend insurance.

(2) Insurance amount.

There is a maximum amount of insurance for each policy or insured. For example, in the United States, the maximum insurance amount for each policy or insured is usually $5,000, while in China, the maximum insurance amount is limited to 65,438 RMB+0,000 RMB.

(3) Insurance rate.

Because of the following reasons, the rate of simple life insurance is relatively higher than that of ordinary whole life insurance: First, the insured is generally a low-income class, so the mortality rate is relatively high; Second, collecting insurance premiums at home increases sales and management costs; Third, the policy failure rate is high.

(4) Payment of insurance premiums.

Considering the affordability of low-income people, the premium of simple life insurance is generally paid monthly or weekly.

(5) exemption from medical examination.

Because the insured amount is low, there is no physical examination when underwriting, and only the declaration of the insurance application and the explanation of the insurance agent are used as the basis for underwriting. However, in order to prevent adverse selection, insurance companies usually stipulate in the incontestable clause that the insured suffers from serious diseases within a certain period of time (usually 2 years) before insurance, and the insurer can terminate the insurance contract during the defense period.