Life insurance, accident insurance, and various other types of insurance are quietly playing a huge role in American society. Zheng Cunzhu, the chairman of the Chinese Democratic Party United Headquarters in Los Angeles, has a deep appreciation for this. The unexpected death of a close friend made him realize the importance of purchasing insurance to secure the financial stability of a family.
In an interview last Saturday (4th), Zheng Cunzhu expressed that he had been shocked twice in the past year. One was the sudden passing of a member of the democracy organization due to illness, which had a profound impact on their family and friends. Amidst his shock, he also lamented the unpredictability of life. Since this member was the main source of income for the family, besides supporting his wife and their two children’s education, he was initially concerned for his friend’s family. However, before his friend’s passing, he had purchased various insurances such as life and accident insurance. The insurance company quickly processed the claims, providing financial security for his family, which was another eye-opener for Zheng.
“We, many of us in the democracy movement, have changed our perspective on insurance,” Zheng Cunzhu said. Previously, he had mostly declined insurance sales pitches from many insurance companies. Recently, he has been studying insurance and trust laws at law school. “After this incident with my friend, I have indeed changed my views. Unfortunately, given my age and the surgeries I underwent during the pandemic, I have tried applying for life insurance twice but was not approved.”
Many newly arrived Chinese people in the United States also harbor similar feelings of distrust or lack of importance towards insurance. Zheng Cunzhu believes this can be mainly attributed to two reasons.
The first reason is the lack of understanding among Chinese people about American society. In fact, the majority of Americans place significant value on life insurance. In 2023, about 52% of Americans had some form of life insurance, with a total of 267 million policies.
Zheng Cunzhu realized, “After retirement, many Americans lead a very relaxed life, with some even having higher incomes after retirement than during their working years.” He discovered that many people have insurance policies that, according to the terms, provide various retirement benefits, along with monthly allowances (tax-free) from the insurance company after reaching a certain age, resulting in a monthly income of thousands of dollars. “These retired individuals have truly achieved financial freedom.”
The second reason is that before leaving China, individuals often witness dishonesty and lack of credibility among insurance companies, leading to a strong sense of distrust towards the insurance industry. Zheng Cunzhu stated that due to China not being a true market economy and insurance companies being monopolies with privileged characteristics, there exists an unequal relationship between policyholders and insurance companies.
“In the West, if I feel that the terms of your insurance policy are unfair, or if my claim is not reasonably compensated, I can sue in court. However, in China, you basically have no recourse.” He explained that this is also why former Chinese Premier Wen Jiabao mentioned that without political system reform, the market economy cannot operate effectively.
Zheng Cunzhu lamented, “Chinese insurance companies not only fail to fulfill their roles but in many cases, they become tools for exploitation, much like the Chinese stock market.”
Many wonder if the expenses paid for insurance will go to waste if no accidents occur. Zheng Cunzhu explained that American life insurance comes in various types, including accident prevention insurance and those that combine savings and accident prevention functions; the premium amount is related to the insured’s age and coverage level, and insurance companies also consider each family’s financial burden.
He provided an example that although he had not purchased insurance for himself, he bought a type of insurance for his daughter at a young age that includes education, savings, and investment functions, allowing her to receive over two thousand dollars monthly in her thirties.
“Just like I said, why do American elderly people enjoy retirement living? Besides social security benefits and retirement pensions, they also have insurance company ‘retirement benefits.'” In contrast, he said, “Many Chinese retirees in the U.S. rely on social security benefits, receiving only seven to eight hundred dollars per month, which makes life quite challenging.”
Some worry that buying certain types of insurance may seem unlucky. Zheng Cunzhu explained that many insurances can benefit the insured and their family during their lifetime, such as disability or long-term care insurance, providing enough funds to access high-quality services for themselves, which is very helpful for individuals and families.
Lastly, Zheng Cunzhu emphasized that even newly arrived Chinese individuals in the United States, despite financial constraints, can find insurance suitable for themselves and their families. For instance, short-term accident insurance may require only a few tens of dollars per month, thereby providing financial security for their families in case of accidents.