The Establishment And Development Of China's Life Insurance Trust System

With the on-going of social progress, the increasing uncertainties involved in both work and daily life, more and more people are becoming aware of the importance of insurance. Through the insurance system, insecurity and uncertainty can be diversified effectively. However, is the purchase of high value insurance alone enough to put all the buyers'worries aside? The answer is no. For those minors or who have no civil act capacity or restricted civil-act capacity, their families bought life insurance, and when certain accidents happen , even if insurance companies pay the amount of claims on time, the beneficiary may not fully enjoy the insurance benefits. Not only the case, family disputes, custody battles, and other social problems can also be aroused.It would appear that life insurance can indeed make economic compensation to the unfortunate family, but it can not guarantee that the rights and interests of beneficiaries can be protected in accordance with the policy holders .Life insurance trust, a financial product arising from the integration of insurance and trsut, can solve the above problem.The article, altogether are divided into 4 parts to introduce the establishment and development of life insurance trust system at present time in China.1.Life insurance trust system principleLife insurance trust, also known as insurance trust, is a financial product combined of insurance and trust services. In life insurance trust system, the payment offered by the insurer is seem as trust property. The client (in this case the client is often based on their own for the insured, their children For the establishment of the beneficiaries of life insurance policyholders of the contract, and has been insured and the insurer's dual role, referred to collectively as a client) and the trust sign a insurance trust contract.When the related accident or insurance expire Payment occurs, the insurance indemnity or insurance companies will deliver the payment to the trustee (the Trust), Who will manage the certain amount in accordance with the agreed contract, and allocate the amount to designated beneficiaries according to the contract, and also pass on the remaing asset to the beneficiaries at the end of the contract period2. The difference between life insurance trust and investing-linked insurance products.Insurance trust and investment-linked insurance, which has been popular in the past two years are both insurance and investment products. Insurance companies use investment-linked insurance to combine the function of protection and investment, which makes the customers gain extra profits rather than only getting the traditional function of insurance. The insurance trust provider, however, in order to allow further extension of the trust business, it will merge the insurance fund and investment functions together, with their diverse financial management functions. Therefore, they both have got the features of insurance and investment. However, they are two different products. Clear understanding of the distinction between life insurance trust and investment-type insurance will help investors make good use of life insurance trust.3. The development of life insurance trust in other countries and regions.In the western developed countries, life insurance trust are developing rapidly. Taiwan's Life Insurance Trust has also been growing fast. However, mainland China's insurance industry started relatively late, and is still at the stage of on-going development, and the trust industry, which is still bot getting a widespread understanding, is in its infancy stage. Whether Life insurance trust can have a smooth development in our country, in theory and in practice there are still many problems to be solved. Understanding of life insurance trus model in other countries and regions can undoubtedly help search for a path for the life insurance trust system.4. The development of life insurance trust in ChinaThrough the analysis of the necessity of developing life insurance trust at this stage, learning from the development experience of foreign life insurance trust, the paper discusses the feasibility analysis of developing life insurance trust in China from both the internal conditions and the external environment. The external environment including economic policy environment and legal environment is improving, the internal conditions, including clients, trust property and trustees have preliminarily existed. In the end, the paper points out some problems that should be paid attention to in life insurance trust management and forecasts the development prospect of China's life insurance trust.