At about 14,000 square miles, the island of Taiwan doesn’t make a big impression based on its size. But what it lacks in area, it more than makes up for in insurance coverage.
According to the Swiss Re Institute, Taiwan ranked first in terms of insurance penetration in 2019, surpassing far more imposing countries in size. The rate of life insurance and annuity insurance coverage was 256.09%, which was equivalent to an average of 2.6 insurance policies per capita in the country, with a penetration rate of 303.71%. “Taiwanese people attach great importance to insurance,” said Yi-Jean Lin, CIAM, FChFP. “The insurance industry is well-regulated by the government’s regulatory agencies. The stability of financial risks gives policyholders peace of mind and confidence, thus relieving social risks through insurance.”
The nine-year MDRT member from Taoyuan says those social risks include the country’s rapidly aging population. Taiwan’s National Development Council estimates that by 2026, the country will become a “super-aged society,” with at least 20% of the population older than 65 years. By 2065, that figure could increase to 40%, suggesting a clear need for protection products for the elderly.
Hsing-jou Wu, a six-year MDRT member from New Taipei City, has seen such concerns in her own practice.
“Due to the aging population, prolonged life expectancy and the lack of support from grown children, clients with financial capability think about how they can use insurance to lower the costs that arise as their physical condition deteriorates in old age,” she said.
In the past, this need was addressed through disability insurance. However, on Jan. 1, 2021, Taiwan abolished disability insurance, primarily due to high claim rate loss. Now advisors are looking for other products to fill the void.
“In 2018, Taiwan had the demographic characteristics of an elderly population: low birthrate and people who marry late or never marry,” Lin said. “Since then, insurance products for personal care such as long-term care insurance and annuity insurance have become popular.”
According to Chen Pei Huang, a 14-year MDRT member from Taipei, long-term care insurance is the option with the most potential for meeting Taiwan’s needs.
“To adapt to an aging population and fewer children, it will be crucial to have a long-term care fund prepared for one’s future in case of ill health,” she said.
But not just the elderly or childless benefit from long-term care insurance. Pei Huang and Wu both have harrowing tales of younger clients in good health who had sudden illnesses upend their financial circumstances. In Wu’s case, the memorable client had a rare and aggressive cancer called ameloblastic carcinoma, the first diagnosis of its kind in the entire country. At just 45 years old, he spent 123 days in the hospital and ultimately had his leg amputated because of complications with the disease. When all was said and done, the insurance company paid about $127,000.
Wu takes great pride in having been with her client throughout the arduous process, from the initial diagnosis all the way to his prosthetic leg fitting.
“If people have to worry about money when they are sick, they are unable to receive the necessary treatment with peace of mind,” she said. “We hope that our work can motivate clients to live and face any challenges with confidence.”
In recent years, Taiwan has introduced new products, including micro-insurance intended to cover end-of-life expenditures. And the island nation has more creative offerings up its sleeve: In 2021, the Financial Supervisory Commission introduced the “Salute to Taiwan’s Mountain and Seas,” a program designed not only to pay tribute to Taiwan’s unique topography, but to entice those involved in mountain and sea sports — such as mountaineering and sailing — to obtain insurance coverage for such risky activities.
But with so many options out there, there’s a greater need for trained professionals to guide their clients in a holistic way.
According to Lin, the global recession of 2008 especially impacted clients who owned investment-linked insurance policies, causing many to cancel their policies. But she was able to use that difficult time to build connections with her clients.
“My clients were reassured by the professionalism and felt that we were standing on their side in the face of the challenges,” she said. “After the economy recovered, our professional services gained the trust of clients and helped us achieve healthy returns.”
A lifetime of service
For Wu, it’s all about providing her clients with services throughout their lives.
“I make myself indispensable so my clients are aware that I can resolve issues related to social insurance, tax law, civil law, labor and health insurance, in addition to insurance matters,” Wu said. “My goal is to become a financial advisor who helps clients overcome challenges.”
It’s a worthy goal that’s shared by her fellow MDRT members. Pei Huang was greatly impacted by her first long-term claim case involving a former classmate who collapsed and subsequently had to undergo surgery. He spent six months in the hospital, but his coverage paid for the cost of a single room in addition to his medical expenses. When the client ultimately died, the $22 million claim was the largest Pei Huang had processed to that point. But she sees her role as being much bigger than any check she might deliver.
“When life comes to an end, what can you leave behind — is it love or unwillingness to let go?” she said. “When an incident occurs, that’s when the value of the insurance industry becomes clear.”