Before signing at the bank counter, check whether it’s a deposit or insurance

42. Before signing at the bank counter, check whether it’s a deposit or insurance

Cost: No cost at all. Just spend a couple of extra minutes reading the contract cover.

In plain terms: Banks may sell insurance on behalf of insurers, but they must not present it as a deposit. The contract cover must clearly state “Insurance Contract” and the insurer’s name in large print; terms like “deposit” or “savings” are strictly prohibited. If the insurer’s name appears on the cover, the money is not a deposit, and cancelling after the cooling-off period will result in losses. In principle, people aged 65 and older can only purchase insurance with guaranteed returns when buying at banks.

Benefit: Regulations explicitly forbid banks from bundling insurance with savings deposits, mutual funds, or other bank wealth products. They may not directly compare insurance returns to deposit yields, nor claim uncertain returns as guaranteed. Insurance documents and promotional materials must not use the bank’s name or logo, nor contain phrases such as “deposit,” “savings,” or “jointly offered by the bank.” The contract cover must display “Insurance Contract” in font size no smaller than 72 points and the insurer’s name in font size no smaller than 2 points. For three specific groups of customers, only insurance products with guaranteed benefits may be sold: applicants aged over 65; applicants aged over 60 purchasing installment-payment plans; and applicants whose annual income is below the local per capita disposable income. Policies for these groups must be manually underwritten by insurers rather than issued automatically at bank branches. Insurance agents are prohibited from selling insurance inside bank premises. For any insurance policy sold by a bank with a term longer than one year, a 15-day cooling-off period applies; cancelling after this period incurs financial losses. (Nationwide, effective October 2019)

Evidence grade: B

Sources: General Office of China Banking and Insurance Regulatory Commission (2019). Measures for the Administration of Agency Insurance Business of Commercial Banks (Chinese Banking Regulatory Commission [2019] No. 179, Articles 30, 31, 32, 36, 42, 49). <https://www.gov.cn/zhengce/zhengceku/2019-12/03/content_5457853.htm>

Notes: This item is rated B because the regulations are very clear, yet no official statistics exist on how much money misled consumers have lost. Elderly family members are especially vulnerable to this issue when making deposits at banks; be sure to check the contract cover for them. If you’ve already signed such a contract, you may cancel it within 15 days per Section 42 (Cooling-off Period). For complaints regarding potential misrepresentation, refer to Section 44 (Assistance with Policy Cancellation). The primary beneficiaries of this guidance are you and your elderly relatives.