The Research Of Reverse Mortgage Development In Chinese Insurance Company

The fall of the birthrate and the increased old people have made a great change on the structure of the Chinese population. China will turn from the adult society into the aging society in the near future. In contrast to developed country, whose economy has not been fully developed; while china became an aging society and had to face problems such as lack of public resource providing for aged, under-developed Social Security system and shortage of the annuities. The family support retirement model has been followed by thousands years, however, the policy of family planning will lead to a worried aspect that there will be a larger number of "four-two-one" type families in china which two couples have to raise four elders and one child. Therefore, how to find a new and efficient model to provide social benefit to old people became a very urgent problem. As the developed country has been aging society for a long time and accumulated many viable experiences in old-age care, it is a convenient way to learn these valuable experiences from developed countries and design our old-age care products and systems, according with the situation of china. Reverse Mortgage, which originated in Europe and now developed in US, is an excellent and creative financial instrument to help poor older people. The name of "reverse mortgage "is from its reverse cash flow compared to general mortgage, which means the borrower obtain money from the lender with his/her own house as the collateral and the loan come todue only when the borrower is dead or move off permanently. Reverse mortgage reallocate the money of old people within their lifetime and relief the problem of "housing rich and cash poor", make their money to the biggest utility of their life time.At first, this paper introduce the definition, theory, character and category of the reverse mortgage, then analyze the operation model in US, Canada, UK and Singpor, through which we can research the Chinese model. Follow this the article systematically describes the basic point for reverse mortgage application in Chinese life insurance according to the new life insure product exploitation procedure, mainly covers the market environment, economic and, culture background, product in same industry, current status of Chinese life insurance industry and some issue in relation to current regulations and laws, especially studies the linkage between reverse mortgage and long-term care insure. This paper analyzes the supplier risks and designs the actuarial model both for sing life and double life. The assessment to the result of the model implies that reverse mortgage can bring benefit both for the supplier and the borrowers. The author hope this article will provide some theory supporting and operation ideas for Chinese life insurance to promote reverse mortgage at suitable time.