What's the difference between personal pension and endowment insurance?

Personal pension refers to the pension fund formed by individuals' active savings according to their own wishes and abilities, while endowment insurance means that the state, enterprises and other units pay a certain proportion of endowment insurance premiums to the social security fund to provide treatment and protection for employees after retirement.

Although both personal pension and endowment insurance are designed to deal with the life and medical problems in old age, there are great differences between them in nature, source, management and benefits. First of all, personal pension refers to the pension fund formed by individuals actively saving according to their own wishes and abilities. Usually, individuals or their families buy commercial insurance or investment and wealth management products in the market, and the amount and income of pensions are determined and borne by individuals themselves. Endowment insurance means that the state, enterprises and other units pay a certain proportion of endowment insurance premiums to the social security fund, which is managed and operated by the state in a unified way. Insured persons pay insurance premiums according to the prescribed standards and obtain a certain scale of basic pension. Secondly, the sources of personal pension and endowment insurance are different. Personal pension is formed by individual independent savings or investment and financial management, and endowment insurance is paid by the state, enterprises and other collectives to the social security fund, forming a large pension security system, which is managed and supervised by the state. Third, individual pension and endowment insurance are managed in different ways. The management and operation of personal pension is usually completed by insurance companies or other financial institutions, while endowment insurance is managed and supervised by the state in a unified way, which is in line with public interests and policy orientation. Finally, there are also differences in the interests of individual pension and endowment insurance. The amount and income of personal pension are decided and borne by individuals themselves, so there may be greater risks, but it also has the advantages of relative flexibility and high income; Endowment insurance is managed and operated by the state in a unified way, and pensions are calculated and paid according to the prescribed standards. Although it is relatively safe, it also lacks corresponding flexibility and selectivity.

How to choose personal pension or endowment insurance? Individuals need to decide whether to choose personal pension or endowment insurance according to their own specific conditions. If individuals have strong management and investment capabilities and are willing to take certain risks, they can consider buying personal pensions; If you want to be safe and sound, and you don't have enough confidence in your personal finances, you can choose to participate in endowment insurance. Of course, you can also combine the two methods and make comprehensive consideration and choice according to your actual situation.

There are great differences between individual pension and endowment insurance in nature, source, management and treatment. Individuals should choose whether to buy personal pension or participate in endowment insurance according to their own economic strength, investment and financial management ability and risk preference, and make comprehensive consideration and choice in the specific operation combined with the actual situation.

Legal basis:

Article 15 of the Social Insurance Law of People's Republic of China (PRC) stipulates that endowment insurance consists of overall pension and individual account pension. The basic pension is determined according to factors such as individual cumulative payment years, payment wages, average salary of local employees, personal account amount, average life expectancy of urban population, etc.