A citizen in Changsha City, Hunan Province, China, who pays an annual insurance premium of 7000 RMB found himself unable to claim insurance benefits when he fell seriously ill recently.
According to the Daily Economic News on November 25th, Mr. Wang from Changsha purchased a dividend-type insurance policy named “Huaxia Fulimen Pension Insurance” from Huaxia Insurance Company in 2014 for his wife. This policy was for a duration of ten years, with additional coverage for major illness insurance and hospitalization medical expense reimbursement.
Mr. Wang said, “I was told by the agent to pay 7000 RMB annually through bank card deduction. I’ve been paying for 10 years.”
In August this year, Mr. Wang’s wife was hospitalized for 11 days due to a sudden cerebral aneurysm, incurring medical expenses of over 100,000 RMB.
After his wife’s discharge, Mr. Wang submitted relevant documents and receipts to the insurance company for a claim, only to be informed that the insurance was no longer valid, and therefore, no claim could be made. “I was dumbfounded at that moment, almost on the verge of collapsing,” Mr. Wang said.
An agent from Ruizhong Insurance (in November 2023, Ruizhong Insurance acquired the Huaxia life insurance business along with its assets and liabilities) told the Daily Economic News, “There is a premium rate table in the insurance policy, and every year’s premium is reminded through SMS. As the main insurance was fully paid last year, this year couldn’t be advanced. We have already applied for a refund of premiums as per Mr. Wang’s wife’s request. The specific handling will depend on the company.”
The insurance policy of Mr. Wang also included hospitalization medical expense reimbursement insurance (2013), with the premium increasing each year according to age brackets, starting from 360 RMB per year for a coverage amount of 5000 RMB when Mr. Wang purchased it. However, from 2022, the premium had risen to 520 RMB per year.
The Ruizhong Insurance agent explained, “During the period from March 31, 2022, to May 30, 2022, the bank attempted deductions, but due to insufficient funds in the account, the policy went into a payment delay. After two years of payment delay, which was in 2023, the main insurance was fully paid, and no renewal was required in 2024. The client only needed to pay the medical insurance premium this year, but due to the payment delay, deductions couldn’t be made from the bank account.”
Furthermore, the insurance company stated that Mr. Wang’s wife’s illness did not fall within the scope of major illnesses as defined in the contract, rendering both the major illness insurance and hospitalization medical expense reimbursement insurance unusable. Additionally, the hospitalization medical expense reimbursement insurance became invalid this year due to insufficient medical insurance coverage.
Mr. Wang expressed his confusion, “There are still thousands of RMB in my account, why can’t they deduct it? And regarding the insufficient amount, why didn’t they inform me to make up for it? I always thought that paying on time each year was enough.” Mr. Wang questioned the insurance company’s failure to fulfill its obligation to notify him.
In response to this, Liu Yan, a member of the Management Committee, Senior Partner, and Deputy Director of the Hunan United Entrepreneur Law Firm, analyzed that if the policyholder fails to replenish the account for insurance deductions on time, resulting in the inability to make deductions, the policyholder bears a certain responsibility. However, if the insurance company discovers the inadequate funds in the policyholder’s account or changes the payment method, they should promptly notify the policyholder according to the notification method specified in the contract; otherwise, they should bear responsibility.
Public information shows that Ruizhong Life Insurance Co., Ltd. was approved to operate on June 28, 2023, with a registered capital of 56.5 billion RMB, headquartered in Beijing.
On November 8, 2023, the Beijing Regulatory Bureau of the China Banking and Insurance Regulatory Commission approved the transfer of insurance business between Ruizhong Life Insurance Co., Ltd. and Huaxia Life Insurance Co., Ltd., effectively safeguarding the legitimate rights and interests of insurance consumers and creditors.
Currently, the insurance company has indicated that they have already applied for a refund of premiums as per the request of Mr. Wang’s wife.