After a 22-year suspension, dividend-based critical illness insurance has officially been "unbanned."
On November 13, PING AN announced via an interactive platform that it has initiated the development of dividend-based critical illness insurance products. The company expects to launch these products once relevant regulations are finalized, aiming to capitalize on market opportunities. Sun Hanjie, Chief Actuary of PING AN Life, confirmed the move, stating that research on dividend-based critical illness products is underway, with plans to expedite development and rollout to expand the coverage scenarios for dividend-based offerings.
This strategic shift follows regulatory guidance. On September 30, 2025, the National Financial Regulatory Administration issued the "Guidelines on Promoting High-Quality Development of Health Insurance," which explicitly permits insurers with strong regulatory ratings to offer dividend-based long-term health insurance starting October 2025. This marks the official lifting of the 22-year ban on such products.
In 2003, regulators suspended dividend-based critical illness insurance due to multiple concerns. Some insurers had marketed these products as pure investment tools, deviating from the core purpose of health insurance protection. Additionally, the complexity of health insurance products, coupled with insufficient actuarial data, made risk management even more challenging when dividend mechanisms were introduced. Furthermore, there were no international precedents for dividend-based health insurance.
Over time, China's insurance industry has transitioned toward high-quality development, with enhanced regulatory tools and tiered market access mechanisms addressing past issues. Against the backdrop of low interest rates, the industry also seeks new products and business models to revitalize the market.
Traditional critical illness insurance has seen declining new premium income for five consecutive years, as its rigid coverage and high pricing fail to meet evolving customer demands. Consumers now seek integrated solutions combining protection and wealth management, while inflation erodes the real value of fixed payouts. With lower assumed interest rates, fixed-income insurance products have become less attractive, making dividend-based products with floating returns more adaptable. Industry experts predict dividend-based health insurance could capture half of the market in the future.
However, from a customer perspective, dividend-based critical illness insurance may be more expensive. Zhongtai Securities notes that as assumed interest rates decline, the leverage ratio (coverage/premium) of critical illness insurance has dropped, increasing sales challenges. Compared to traditional products with a 2.0% assumed rate, dividend-based versions priced at 1.75% will likely carry higher premiums. Additionally, some "dividend-based critical illness insurance" products currently marketed are actually bundled plans combining dividend-based main policies with critical illness riders, which some insiders dismiss as "pseudo" offerings.
Amid low interest rates and shifting customer preferences, leading insurers have pledged to embrace dividend-based critical illness insurance. Beyond PING AN, CPIC has stated it will launch products promptly after regulatory details are released, while New China Life is prioritizing research and development.
Top insurers are aligning with this industry trend, though companies with weaker regulatory ratings will be excluded under the new guidelines. The health insurance market is expanding, with major players integrating health into broader strategies. For instance, CPIC unveiled its "352 Health Service Blueprint" in 2023, outlining its health management strategy. PICC Health continues to innovate with "insurance + health management" models, building a nationwide ecosystem. PING AN advances its "integrated finance + healthcare" strategy, while Cigna Life focuses on cost control and dividend-based product transformation, eyeing growth in health insurance.
Operationally, PING AN, CPIC, and PICC Group each have dedicated health insurance subsidiaries, while PING AN, CPIC, and New China Life operate health management companies. PICC Health and China Life established new health management entities in September 2025. PING AN Health has exited its parent company's life insurance sales channels to operate independently. Major insurers are expected to further strengthen their health insurance and management investments in response to regulatory support.
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