The Analysis Of Tax Deferral Endowment Insurance Impact On Individuals

At present our country is an ageing society, according to the sixth census data, thenumber of population aged60and above is177million, about13.26percent, thenumber of population aged65and older population is119million, about8.87percent,the situation of aging population is becoming more and more serious. In our countrythe first pillar of social basic pension system has been established, but the existingbasic old-age insurance system has its own deficiencies. The income replacement rateis relatively low as it only provides the basic old age pension. Besides, based on thepay-as-you-go system, the gap between capital requirement and financial sourcebecome larger and larger. As the second pillar，the corporate pension’s scale is smalland in different sectors and regions, the levels of annuity business development isuneven much. In this case, it is necessary to encourage the development ofcompensatory endowment insurance as the third pillar to build the social basicendowment insurance system to go through the ageing population peak safely.Therefore it is urgent to take certain incentives, such as tax incentives to encourage thedevelopment of individual compensatory endowment insurance.Tax deferred type endowment insurance is the policyholders to pay premiums inthe first time in proceeds deducting, in the lead again when the insurance levy. Thiskind of insurance allows individual to pay insurance premiums within a certainproportion that can be deducted before the individual income tax. Firstly, this paperanalysis the current serious situation of aging population in our country, the first pillarof the basic endowment insurance and the second pillar of the enterprise annuity arenot effectively alleviate the pressure of aging population, therefore it is necessary todevelop deferred compensatory endowment insurance policy as the third pillar type inorder to ensure to go through the ageing of population’s peak safely. Secondly, thispaper analyzes the successful experience about implementing supplementaryendowment insurance in developed countries, and using foreign successful experiencefor reference. Thirdly, the paper analyze the tax deferred pension insurance influenceon individuals from the perspective of economics. This paper mainly uses the life cyclemodel, the person’s life cycle is divided into two stages such as work period andpension period, then concretely analysis how deferred tax policies increase individualutility by adding the individual consumption in the working period and raising theincome level of retirement, thus provide theoretical basis for tax deferred type endowment insurance policy of EET mode; Finally, on the basis of learning frominternational successful experience and our national specific condition, this paper putforward policy suggestions to implement tax deferred type compensatory endowmentinsurance in ChinaThe main innovation point of this paper is to use life cycle model to quantitativelyanalyze the influence of tax deferral endowment insurance on individuals, and putforward the optimal taxation. In this paper, the significance of the study is to providesuggestions in implementing tax deferred type compensatory endowment insurance forthe authorities, besides, insurance companies can provide products which can meet themarket demand when the policy is adopted to increase the premium income.