The FSC reminds consumers that insurance is intended as preparation for
future unknown risk, to allow losses to be made up through insurance. In
essence, it is a form of protection not a way to make profit. The products
referred to as “insurance deposit” on the market today feature the word
deposit but they are still insurance products and not bank time deposit. If a
policy holder surrenders an endowment insurance contract early, they must
still pay the protection fee and loading fees for the period of cover and will
only be able to collect part of the premium paid. For this reason, consumers
should carry out careful assessment before buying an endowment insurance
product.
The FSC stated that, at present, quite a few insurance companies offer
endowment insurance. This refers to life insurance with a relatively high living
benefit component. As well as death benefit and total disability benefit, this
kind of insurance product usually provides the policy holder with regular or
lump sum living benefit after a certain period of time, thus they are commonly
referred to as endowment insurance. However, endowment insurance still
has the characteristic of insurance protection and is different to bank time
deposit which attaches importance to capital yield.
The FSC reminds consumers to fully assess their own protection needs
and capital receipt and expenditure situation during the premium payment
and protection period and to read the contents of the contract carefully
before buying endowment insurance, to avoid the situation in which, when
the insurance contract is terminated early because it does not match
requirements or capital is needed by the policyholder, not only is insurance
cover ended, the surrender value received may also be less than the
premium paid, causing a loss.