On December 5, 2012, McKinsey & Company, a globally renowned management consulting firm, released a forecast in Shanghai stating that given the Chinese life insurance market is expected to grow at an annual rate of 10% over the next 5 to 10 years, its total market size could reach $406 billion by 2020, making it the world’s second-largest market after the United States.
There is a saying in Japan: if something happens while mountaineering, you could go bankrupt. To avoid such a situation, it is common sense to buy “mountain insurance” before entering the mountains, with premiums costing around 5,000 yen (approximately 400 RMB) per year.
Recently, a report titled “Sichuan May Introduce Compensation Mechanism; Illegal Mountaineering Could Result in Fines Up to 50,000 Yuan” has drawn much attention from hikers. It is understood that the current draft of the “Sichuan Mountaineering Management Measures” (revised) has been shortlisted as a candidate project in Sichuan Province’s 2013 legislative plan. Yin Xu, deputy director of the Policy and Regulations Department of the Sichuan Provincial Sports Bureau, also revealed that the draft is still under revision. In addition to increasing the fine amounts, the new draft may also establish a clause for the recovery of rescue costs. “After referring to the penalty standards in the Tibet Mountaineering Management Regulations, we plan to raise the fine amounts to 10,000, 20,000, or even 50,000 yuan, but nothing has been finalized yet,” said Yin Xu.
In fact, in developed countries, people engaging in outdoor sports need to purchase two types of insurance: one is personal accident insurance, and the other is rescue insurance. In case of any issues, the insurance company will cover the compensation. However, currently in China, the specialized insurance for mountaineering has few participants and high premiums, and is not designed for ordinary hikers.
Although almost all outdoor clubs currently require their members to purchase insurance, many domestic insurance companies include a clause in their travel insurance and rescue contracts titled “exclusions” which states: “the insured person engaging in high-risk activities such as diving, water skiing, rafting, skiing, parachuting, rock climbing, or exploration,” and will not provide compensation in case of danger. For insurance companies, such exploration activities are considered high-risk outdoor projects with significant risks of injury or death, and with fewer participants, designing commercial insurance products specifically for such risks is not profitable from the perspectives of insurance claims mechanisms and profitability, which is why there are very few such insurance products in China.
First, conduct a risk assessment
“Hikers” is a proud title for independent travelers, but choosing a completely free travel style means taking on all corresponding risks. In recent years, insurance has also gained increasing recognition among “hikers.” In the checklist of an online user nicknamed “Travel Gear,” travel accident insurance is listed as the top priority. For those who love independent travel, how should they choose insurance? Zhang Juan from Allianz China suggests focusing on three aspects—coverage scope, coverage amount, and exclusion clauses—to identify a product that suits one’s needs.
In terms of coverage scope, travel accident insurance usually includes compensation for accidental death and disability, medical expenses, and hospitalization allowances. Some accident insurance products also cover medical evacuation and repatriation costs, as well as the cost of repatriating remains in case of death, but the corresponding premiums are higher. Travelers are advised to choose based on the risk level of their itinerary.
Whether the set coverage amount is reasonable determines whether the purchased protection can only offer slight comfort in case of an accident, or can truly reduce or even eliminate financial burdens.
Insurance experts suggest that, ideally, the coverage amount for death and total disability should be set at 10 times the insured person’s annual income, which can ensure that the insured person’s family’s quality of life will not be affected for 10 years after an accident.
Finally, exclusion clauses are a particularly important part that “hikers” need to pay attention to. Extreme outdoor sports such as rock climbing, diving, and mountain trekking, as well as transportation methods favored by “hikers” like chartered vehicles or hitchhiking, may not be covered. Carefully studying the insurance’s exclusion clauses is crucial for these “adventurous hikers.”
Specialized insurance is more reliable
So how should one choose insurance for some dangerous sports activities?
A financial advisor from Ping An Insurance told reporters: “If you are a ‘hiker’ who hopes to seek thrills during holidays to relieve daily stress, you might consider Ping An’s outdoor sports insurance. This insurance program covers non-professional high-risk sports such as diving, skiing, and rock climbing, and provides 24-hour nationwide emergency rescue services, undoubtedly offering strong protection for enthusiasts of these high-risk sports.” “Moreover, aspects such as the safekeeping of personal belongings and the security of credit card transactions are also factors consumers need to consider when choosing an insurance plan.” A senior travel insurance expert told reporters that today’s travel insurance is no longer limited to coverage for accidental injuries and medical care, but has expanded to provide comprehensive, multi-dimensional protection for travel based on the actual needs of consumers.
It is particularly worth noting that for tourists planning to travel abroad, it is best to choose an insurance product that includes overseas emergency rescue services. Such services are usually jointly launched by insurance companies and international rescue centers, allowing travelers to receive timely assistance by making a phone call no matter where they encounter danger, either domestically or internationally.
A responsible person from Ping An Property & Casualty Insurance stated that one should choose an insurance company with a good reputation and the ability to provide overseas emergency rescue services, to ensure timely assistance in case of accidents abroad. Additionally, the medical expense advance payment feature in overseas travel insurance is also very crucial. Choosing an insurance product with this function can ensure that victims receive timely treatment in the event of an accident, without treatment delays due to medical expense issues.
Most life insurance products include death liability
The public may have noticed that in every incident of mountaineering fatalities, the compensation received by some deceased individuals is actually the highest. This is because some hikers purchased relatively inexpensive (with relatively low payouts) accident insurance, while also purchasing certain individual life insurance products.
Long-term life insurance products sold by life insurance companies not only cover critical illness protection, but also most importantly include death liability. The coverage is broader than that of ordinary accident insurance in terms of insurance liability, and even includes suicide behavior after two years of policy commencement.
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Blizzard Claims Lives; Pacific Insurance Provides Timely Rescue and Claims
On the morning of November 24, 10 hikers were trapped in the mountains while crossing Ao Mountain in Taibai County, Shaanxi, due to a blizzard, and 3 of them unfortunately lost their lives. After receiving the report, Pacific Insurance immediately arranged for service personnel to assist the hiking team with self-rescue and promptly provided relevant claims services.
On the morning of the 27th, Pacific Insurance received a report confirming that the 10 hikers had previously purchased travel personal accident insurance online through the company, with additional high-risk sports accidental injury insurance. The additional insurance coverage was 300,000 yuan per person, with the insurance period from 00:00 on November 24, 2012, to 24:00 on November 25. Based on the clients’ insurance information, Pacific Insurance preliminarily determined that the accident fell under the insurance liability of the additional clauses. They then provided telephone guidance to the hiking team leader to contact local public security and medical authorities, coordinating emergency assistance and accident handling, and advising the clients on preparing for claims.
Currently, Pacific Insurance’s claims service personnel are in Shaanxi assisting the families of the deceased clients with arrangements for body transfer and other matters, and are prepared to disburse insurance payouts. For the injured clients, Pacific Insurance is also assisting them in receiving treatment and helping them collect claims documentation.