Editor view
Mr. Zhou Peter graduated from clinical medicine department of Shanghai Jiaotong University with a bachelor’s degree, and then obtained a graduate degree in economics from Nanjing University. Now, he works in the general manager’s office of AIA China Jiangsu branch. He has been a doctor for three years and an insurance senior practitioner for 20 years. Here’s Peter Chou’s recorded notes in AIA live studio in March 2020.
The straightforward, promising and honest language of the old and the young brought Peter Zhou a sense of justice, a trustworthy, frank and kind image. But this doesn’t mean that he is only good. In a calm speaking speed, Mr. Zhou Peter builds the insurance awareness of the public, and at the same time criticizes the construction and screening thinking, warning people that danger is the original appearance of the jungle world. People who really devote themselves to life are never ignorant and fearless, but drink water to know the source, and love only family.
This article is more than ten thousand, but it is worth reading. I seldom agree to make such a long article by hand, because it’s my basic etiquette to never recommend a long article that I haven’t read more than three times.
Click the picture to view the Chinese version
I
Let’s start with the Sino US trade war. The first Sino US trade war started in March 2018. As you all know, this trade dispute was initiated by Americans, because Americans feel that they have suffered losses in the process of doing business with China. In a fashionable way, the U.S. has a large trade deficit with China. In a popular way, the U.S. buys more and sells less, while China sells more and buys less. The business is done by the Chinese, and the job opportunities are robbed by the Chinese. So since the U.S. is in trouble in 2018, let’s look at the trade deficit between the U.S. and China in 2017. I see the figure is 275.8 billion The dollar is not small, but there are three problems here.
First, China is the terminal of the industrial chain. They import raw materials or semi-finished products from other countries first, and then make them into final products in China and sell them. Of course, the price of final products is high, such as mobile phones and computers. But China actually makes very limited money and has very limited job opportunities.
Second, we export the most mobile phones and computers to the United States. Apple is the main mobile phone, and Dell is the main computer. Both of them are American companies. In fact, Americans make a lot of money from these businesses.
Third, if the United States does not import these goods from China, it may spend more money to import them from other countries. Then it is impossible for the United States to bring manufacturing back to the United States in the short term. That is to say, it will not solve the problem of American jobs in the short term. Most of its people are not willing to do these low-end production and processing jobs, So we can often hear on TV that this is actually the structural problem of American industry.
So Americans really don’t know these facts, of course not. The trade deficit is just an excuse for him. What he is not satisfied with is the rise of China. From a list of requirements submitted by the United States to China in March 2018, we can see that he asked China to terminate the 2025 “made in China plan” three times, or terminate the relevant arrangements. In fact, since March 2018, it has been a full nine months. By the end of 2018, the trade deficit between China and the United States in that year was more or less. I looked at the figure. It was US $323.3 billion, but it was 17% higher than that in 2017.
II
I don’t want to talk about any economic lesson here. Why should I spend so much time talking about the Sino US trade dispute? Only when we have a clear understanding of the essence of the trade dispute can we accurately judge whether it is short-term or long-term. With a long-term and short-term accurate judgment, we can know whether our investment and financial management plan is reasonable.
You think, if the purpose of the United States is to prevent China’s rise, for a country like China that has been leading the world for thousands of years and has only fallen behind in the last 100 years, how much does it want to revive? Is it possible for China to give in? Of course, it’s impossible; but on the other hand, if the United States now regards China’s rise as a threat to him, then as the world’s leader, he once succeeded in pulling down the world’s second largest threat to his position, including the United Kingdom, Germany, Japan, and the Soviet Union. It’s absolutely impossible for such a leader to give in 。
So what does the combination of these two non concessions mean? That is to say, we can basically judge that such a fight between China and the United States is bound to be a protracted one in the future. The same is true. Although China and the United States signed the first phase of the trade agreement, do you feel that the relationship between China and the United States has improved? No.
So what kind of impact will the long-term struggle have on the economy? The first is that the unemployment rate will rise. If the United States imposes tariffs on us, it will inevitably lead the enterprises in China to seek to build factories in countries that do not need to pay so much tariffs, and then our job opportunities will be reduced;
Second, the corresponding depreciation of the RMB. Recently, this phenomenon has become obvious. Of course, China has sufficient foreign currency reserves and strong hedging ability, which can be stabilized basically. However, the overall trend is that the RMB is in the direction of devaluation. In addition, from an economic point of view, a proper devaluation of the currency is also beneficial to our exports, but if the currency devalues, our consumption power will decline accordingly. Our stock market will fluctuate, and our assets will shrink.
III
So for us, how should we deal with financial management? There are many ways to manage money now, but we can basically divide it into four categories. I will use the four roles on the football field to analogy.
The first is called forward, such as stocks and futures. This kind of investment, you must not be to preserve the value, or to earn money, of course, the risk of losing money is also great, then the striker’s task is to score goals, but sometimes it is difficult to withdraw back when rushing up, right;
Second, we compare it with midfield players, such as bonds and funds. The main direction of this kind of investment is to make money, and the risk is not small, but it will not rush forward like the striker, and sometimes it can be recycled;
The third category is defenders. Corresponding to our financial management, what are the characteristics of defense? One to one. A defender can only defend one attacking player. If two attacking players come to play a pass, you will pass. That’s the same with savings. If you save 10000 yuan, you can only use 10000 yuan in an emergency. There’s no way you can save 10000 yuan for one million yuan;
Next, we will talk about our fourth type of financial management, which we call the goalkeeper. What are the characteristics? That is to say, if he can use his hands, his defensive ability will be better than that of the defenders. When it comes to financial management, it’s a million yuan for 10000 yuan.
Those who are familiar with financial management know that there is a word called leverage. What most people know about leverage is that in the stock market or futures market, because their own funds are not enough, they can do several times their own funds through margin trading, which is called leverage. If this kind of leverage is levered up, of course, it is a great fortune; if it is not, it may be a great misfortune, and even its own funds will be closed.
The leverage I want to talk about here refers to insurance. If there is an opportunity to use it, it is a great fortune in misfortune; if there is no opportunity to use it, it is also a dream of luck. So there can be no great misfortune.
In fact, there are two kinds of goalkeepers, namely, the main force and the substitute. At present, the main force in our country is social security. About every 100 yuan we spend to see a doctor, 60 of which is covered by social security.
There are three characteristics of social security, one is mandatory, as long as everyone meets the requirements; the second is wide coverage, the government’s goal is everyone to enjoy social security, but this wide coverage, in other words, the third characteristic, low level. It’s easy to understand that a high level of coverage is impossible. How can a country afford such a high level of medical expenses for every citizen?
IV
We can see that the inverted triangle in the figure is the direct medical expenses incurred by us, and social security cannot be fully borne. First of all, there is a starting line below the starting line, and the expenses below the starting line should be borne by yourself. Second, there is a top line above the starting line, and the expenses above the top line should also be borne by yourself. Is this inverted trapezoid among them fully reimbursed by medical insurance? Not yet. Some drugs and equipment need to bear part of their own costs, which is called the self pay ratio. You can have a look at the invoice issued by the hospital. It usually says the proportion of self payment.
Besides, is the health insurance full report? You must have guessed it, not yet. There is also a kind of medicine and equipment, which itself needs to be paid in full. For example, when many people are in their 50s, their joints are not good and need to be replaced with artificial knees. The domestic artificial joints and medical insurance can be reimbursed, but their service life is short and the imported artificial joints have a long service life, but they need to pay their own expenses. Which one do you use?
Don’t think we can avoid these self funded drugs or devices, especially when you ask your family to make a choice, you are more likely to choose expensive self funded drugs and devices, right?
OK, the rest is really covered by medical insurance, but do you think that’s all the medical expenses? Does rehabilitation and nutrition need money? I’ve never heard that health insurance can reimburse old hens.
Who will compensate us for the loss of income after illness? If you want to rest for five years, which unit will pay you? And now many people want to go to the United States, Japan and Europe with better medical conditions. How can the current medical insurance cover the cost of overseas medical treatment?
Then you finally remember that we have a replacement goalkeeper called commercial insurance. Just now I said that the medical cost is 100 yuan, and social security bears 60 yuan. That is to say, if our football team plays 100 games, social security becomes the goalkeeper of 60 games, and the replacement goalkeeper of commercial insurance has played several times. According to incomplete statistics, it is about two to five times. The fans said that there are 35 to 38 games left, we would rather not lose the game without the goalkeeper, and we would not let the replacement goalkeeper of the commercial insurance play, because we do not know and do not trust him, of course, these are just jokes.
V
The first characteristic of commercial insurance is voluntary, that is, no one will force you to buy it or not. The second is selectivity, that is, whether you buy a or B’s is also optional. The third is called profitability, which means that some insurance products, such as serious illness insurance, are paid in a fixed amount. It is said that if you suffer from a serious illness, you will lose one million, even if it costs only 50000 yuan, the insurance company will also lose one million. However, it should be noted that the profit here is marked with a quotation mark, because this kind of thing that costs 50000 medical expenses to compensate for one million insurance benefits, you can’t say that the customer is really profitable, because people are priceless, and there are many other hidden losses, you can’t calculate them.
Then we say that commercial insurance is not enough. Will the world be the same? Let’s have a comparison. This data is in US dollars. First of all, I will introduce two concepts. In fact, insurance density is to eliminate population with one year’s premium income, which means how much per capita spends on insurance consumption in one year. Insurance depth is to eliminate GDP with one year’s premium income, which means that the percentage of GDP in the whole year comes from premium income.
We return to the table on the left, and the premium income of mainland China in 2017 is not low in absolute value. 541.4 billion US dollars, second only to the United States, ranks the second in the world, but it can’t support our large population. Divided by 1.4 billion people, the insurance density is only 384 US dollars, falling to the 45th place in the world in a flash. Similarly, our GDP is also very large, so when we divide the GDP by premium, the whole insurance depth will fall to the 36th place in the world in a flash.
So do all Chinese prefer saving to buying insurance. Let’s take a look at the situation in Taiwan, Hong Kong and Macao. That’s obviously not true, especially in Taiwan and Hong Kong. As you can see, the ranking of insurance density and insurance depth is a lever, so the development of insurance industry in mainland China is still very insufficient, with huge potential.
OK, let’s take a look at ourselves from the outside. Here are the data up to 2016. On the left is the ranking of China’s longevity cities, on the right is the ranking of the world’s longevity countries, which is used to compare with the corresponding cities in China. The average life expectancy of each row is close to that of the left and right sides. Then let’s look at three points.
First, both in China and the world, the average life span of the longer lived areas has reached more than 80 years, which is much higher than that at the end of last century;
Second, but second, there are three cities in Jiangsu, including Suzhou, Wuxi and Nanjing, all selected in the top ten of China, which shows that the average life expectancy of Jiangsu is quite high in China;
Third, can you see the characteristics of both China and the world’s longevity areas? Then I believe you can see at a glance that these cities and countries are economically developed areas, not as simple as beautiful mountains and rivers.
For example, air pollution in Beijing is not light, but the life expectancy of the population is very long, and the life expectancy in the economically developed areas is long, mainly because of the good medical conditions. The other is that the health awareness of the population is also good. For example, the common people often take part in the routine physical examination, which has a higher proportion, so that many diseases can be found in a relatively early stage, and it is relatively easy to treat.
VI
So life extension is good for us. Some people say it’s nonsense. Of course, it’s good. Do you want to live a short life? Yes, longevity is certainly a good thing, but if it’s a long life of illness, a long life of self-care, or a long life of agony, do you want it? Next let’s look at the three problems that longevity brings to us.
The first problem is that there is a high incidence of serious and chronic diseases. According to a number of studies conducted by the University of London, Cambridge University and Farr Research Institute in the UK, before the age of 85, the risk of cancer in the UK is 50%, and the risk of cardiovascular and cerebrovascular diseases is 46%. Then the so-called cardiovascular and cerebrovascular diseases are what we often call myocardial infarction, stroke, and dementia. In the past two years, we have known one thing through the media Three diseases are called Alzheimer’s disease. This is actually Alzheimer’s disease, which is also a kind of dementia. Then let’s take a look at the situation in China. According to the statistics of the health commission in 2015, 86.6% of China’s deaths are caused by cardiovascular and cerebrovascular diseases and malignant tumors.
But I would like to remind you that you should not think that the remaining 13.4% of them are dead and dying without disease. On the contrary, in this 13.4% of them, the vast majority of them have not yet got cardiovascular disease or malignant tumor, such as the death of children, infectious diseases, suicide of teenagers, and accidental death of individuals Wait.
Then maybe you will wonder, can’t there be a decent way to die? Yes, of course, but it’s rare. It should be said that there are people who are dying, but there are very few people who are dying without illness. Most people who are dying are still in their sleep, which is caused by the attack of cardiovascular and cerebrovascular diseases.
So why do we say that? Because experience tells us that many people can live to be 100 years old now, right? This means that if there is no disease and no disaster, human genes support us to live to be 100 years old. Agree? If we die before we are 100 years old, you have to say that this is the end of nothing. It seems that this is a bit beyond our grasp,
In addition, according to the 2017 China cancer report, the risk of cancer in China before the age of 85 is 36%, which seems to be lower than that in the UK. However, considering that there are still many poor places in China, the medical record is not so perfect, we think that 36% is underestimated.
In addition, according to the relevant data of the health care Commission, the risk of Alzheimer’s disease in China is 50% before the age of 85. I don’t know if you have noticed that there is a popular saying on the Internet that if you live long enough, you will get cancer. There is some truth in this sentence. In fact, it’s more than cancer. The diseases mentioned above are all related to the prolongation of life span. This is also one of the reasons why in recent years, it has been found that the product of major illness insurance is more and more popular.
