# 5. Don’t waste money This section is purely about money: how much you can save, how much your yearly returns differ, and what amount you can expect to get back over the long run. None of these figures are converted into years of life or time saved. Entries dealing with investments simply explain how to do the calculations; they rely only on verified historical data and do not constitute any investment advice. ### 1. Turn off all automatic renewals and switch to manual renewal upon expiry - Cost: No cost at all. Simply review the lists of automatic payments in Alipay, WeChat Pay, Apple, and Android — this takes only 10 to 20 minutes. From then on, you’ll need to manually initiate each renewal yourself. - In plain terms: What you’ll save is exactly the money spent on subscriptions you no longer use but are still being charged for each month. It takes less than 20 minutes to go through the automatic payment lists in Alipay, WeChat Pay, Apple, and Android. By regulation, merchants must provide a clear notice before charging you, along with an easy-to-find and readily accessible option to cancel at any time. - Benefit: The amount saved equals the total cost of those subscriptions you no longer need yet continue to pay for. This varies from person to person, so there’s no single universal figure. Regulatory rules also require merchants to give you a clear pre-charge notice and a simple, cost-free option to cancel at any time (China, effective since 2021). - Evidence grade: C - Sources:国家市场监督管理总局 (2021, 2025 修正). 网络交易监督管理办法（总局令第 37 号，第十八条）. - Notes: For services you actually use regularly, annual subscriptions are generally cheaper than monthly ones, so keeping automatic renewal on for these is more cost-effective. You should only turn off automatic renewal for those subscriptions you’ve long forgotten about yet are still being charged for. ### 2. Conduct the annual tax reconciliation from March to June; be sure to include all eligible special deductions - Cost: No cost involved. The process can be completed in just a few minutes via the “Individual Income Tax” app. - In plain terms: The following groups of people typically receive a tax refund after completing this process: those who only worked for a few months throughout the year, those who changed jobs mid-year, or anyone who failed to claim deductions for child education, mortgage payments, rent, or elderly dependents. It takes only a few minutes to finish on a mobile device. If your total annual income falls below 120,000 yuan, or if the amount of tax you owe is under 400 yuan, you may skip this step. - Benefit: This process consolidates calculations for four types of income: wages and salaries, labor remuneration, author’s fees, and royalties. Any overpaid tax is refunded to you, while any underpaid amounts must be paid up. There are two scenarios where you may forgo this process: when your total annual income is under 120,000 yuan, or when the tax you owe is less than 400 yuan. These thresholds were set by the State Taxation Administration in 2023 and remain in effect through December 31, 2027. Conversely, the groups mentioned above are precisely those who usually qualify for a tax refund after completing the reconciliation. - Evidence grade: A - Sources:国家税务总局 (2025). 个人所得税综合所得汇算清缴管理办法（第六条）及其解读. ；财政部、税务总局 (2023). 关于延续实施个人所得税综合所得汇算清缴有关政策的公告. - Notes: Even individuals who owe tax must complete this process; failure to do so is illegal. There are seven categories of special deductions available: child education, continuing education, major illness medical expenses, mortgage interest payments, rent payments, elderly dependents support, and childcare expenses for children under three. Note that you may claim either mortgage interest or rent deductions, but not both. ### 3. Housing provident fund isn’t just for buying a home: it can be used for renting, home renovations, and paying property taxes, effective from September 20, 2026 under new regulations - Cost: No cost at all. You only need to complete the withdrawal application once. - In plain terms: The housing provident fund isn’t limited to home purchases. The new regulations list nine eligible scenarios for withdrawals, including renting, renovating a personal residence, and paying property taxes. Once you submit an application, the housing provident fund authority must respond within three days whether your request is approved or not. - Benefit: The updated regulations expand eligible withdrawal scenarios to nine total. These include covering rental payments, funding home renovations, and paying property taxes for a residence you own. The housing provident fund authority must issue a decision on your application within three days of receiving it, either granting or denying the withdrawal request. - Evidence grade: A - Sources:国务院 (2026). 国务院关于修改《住房公积金管理条例》的决定（国务院令第 844 号，2026 年 7 月 31 日国务院第 93 次常务会议通过，「自2026年9月20日起施行」）：修改后第二十四条「职工有下列情形之一的，可以提取职工住房公积金账户内的存储余额：（一）支付房租的；（二）购买、建造、翻建、大修自住住房的；（三）偿还购房贷款本息的；（四）装修自住住房的；（五）支付自住住房物业费的；（六）离休、退休的；（七）完全丧失劳动能力，并与单位终止劳动关系的；（八）出境定居的；（九）国务院批准的其他住房消费情形。」；第二十五条「住房公积金管理中心应当自受理申请之日起3日内作出准予提取或者不准提取的决定」；第十八条缴存比例「均不得低于职工上一年度月平均工资的5％」. - Notes: The funds in your account consist of your own salary contributions plus matching contributions from your employer. If left untouched, these funds earn only a very low rate of interest. The regulations also specify that in cases of employee death or declared death, heirs and legal beneficiaries may withdraw the full account balance. Exact required documents and application procedures are determined locally by each regional housing provident fund authority, so be sure to check your local guidelines before applying. ### 4. Recalculate your mobile and broadband plans annually: downgrade unused services, and file a complaint if the carrier refuses to comply - Cost: No expense at all. It takes just a few minutes to review your bill. The real challenge is resisting the pressure from customer service reps who try to dissuade you from downgrading. - In plain terms: Older plans you’re currently on often cost dozens of yuan more per month than newer plans now on sale. Those extra monthly fees add up to hundreds of yuan wasted each year. By regulation, carriers have no valid reason to reject your request to switch plans, delay processing it, or impose special pricing tiers solely for customers making such changes. If they refuse without justification, you can file a formal complaint. - Benefit: Ministry of Industry and Information Technology rules explicitly state that carriers must not “refuse, obstruct, or delay providing number portability services to users without valid reasons”, nor may they “use blocking or restrictive technical measures to compromise the communication service quality of such users”. They are also prohibited from “creating dedicated pricing or marketing plans for customers exercising their right to port their numbers”. Older plans typically cost dozens of yuan more per month than current offerings, so sticking with them results in hundreds of yuan wasted annually. - Evidence grade: A - Sources:工业和信息化部 (2019). 携号转网服务管理规定（工信部信管〔2019〕242 号）. - Notes: First, use your carrier’s official app to check your actual monthly data and call usage over the past six months, then choose a plan matching those figures. If a customer service rep claims “you must visit a physical store to downgrade” or “contract terms prevent any changes”, ask for written proof of those claims. If none is provided, file a complaint via the 12300 hotline. ### 5. Not buying lottery tickets - Cost: It costs nothing. Not buying means you save money. - In plain terms: According to regulations, at least 50% of sales revenue from lottery games must be paid out as prizes; for the Double Color Ball game, this figure is 51%. In other words, for every 1 yuan you spend, you can expect to receive back only 0.51 yuan on average over time — meaning you lose 49% of your money. In 2024, China sold 623.486 billion yuan worth of lottery tickets; of that amount, 161.031 billion yuan went directly into public welfare funds and was never distributed as prizes. - Benefit: Fiscal regulations set minimum payout ratios: 50% for lottery and number-based games, 65% for instant-win games, and 73% for wagering games. For the Double Color Ball game, 51% of sales revenue is allocated to prizes, which means only 51 yuan out of every 100 yuan spent is paid out as winnings. On a personal level, this translates to an average return of just 0.51 yuan per 1 yuan spent over time — a net loss of 49%. In 2024, total lottery sales in China reached 623.486 billion yuan; 161.031 billion yuan of that amount was earmarked for public welfare and never returned to players (China, 2024). - Evidence grade: A - Sources:财政部 (2015). 关于规范和加强彩票资金构成比例管理的通知（财综〔2015〕94 号）. ；财政部 (2025). 财政部公告 2025 年第 8 号（2024 年彩票公益金筹集分配情况）. ；中国福利彩票双色球游戏规则（第十四条）. - Notes: Over the long run, buying lottery tickets guarantees a financial loss; this is a fixed rule of the system and has nothing to do with luck. Buying tickets is fine if you treat it as a form of entertainment costing 2 yuan per play, but it should never be viewed as a way to invest or save money. ### 6. Walk away the moment you see “high returns,” “guaranteed returns,” or “sure profits” - Cost: Zero. Just pause for a moment when you encounter these phrases. - In plain terms: Regulatory authorities themselves state that any product offering a return rate above 6% should raise red flags, those above 8% are highly risky, and anything above 10% means you should expect to lose all your principal. Legitimate financial products are no longer allowed to guarantee returns or principal safety. Any losses incurred from participating in illegal fundraising efforts must be borne by the individual investor; there is no one to compensate you if things go wrong. - Benefit: In 2018, the former chairperson of the China Banking and Insurance Regulatory Commission stated at the Lujiazui Forum: “Any product offering a return rate above 6% should raise red flags, those above 8% are highly risky, and anything above 10% means you should expect to lose all your principal.” New regulations for asset management require financial institutions to “not guarantee returns or principal safety,” and also stipulate that “when facing difficulties in fulfilling payment obligations, financial institutions must not provide any form of financial support to honor their commitments.” Hence, legitimate financial products no longer offer any guarantee of principal safety. Any losses from illegal fundraising efforts are “to be borne by the individual investors themselves”; no one will compensate you if you suffer losses (China, 2018, 2021). - Evidence grade: A - Sources:郭树清 (2018). 防范化解金融风险 奋力跨越重大关口（第十届陆家嘴论坛讲话，国家金融监督管理总局官网）：「在打击非法集资过程中，努力通过多种方式让人民群众认识到，高收益意味着高风险，收益率超过6%的就要打问号，超过8%的就很危险，10%以上就要准备损失全部本金」. ；天津市地方金融管理局转载. ；中国人民银行等 (2018). 关于规范金融机构资产管理业务的指导意见（银发〔2018〕106 号，第二条、第六条）. ；国务院 (2021). 防范和处置非法集资条例（国务院令第 737 号，第二十五条）. - Notes: The 6%, 8%, and 10% thresholds are estimates set by regulators based on practical experience, not formal legal provisions. These figures were mentioned in the context of cracking down on illegal fundraising efforts, and apply specifically to financial products and investment firms that promise unusually high returns. This information does not constitute any form of investment advice. ### 7. Avoid making minimum payments or taking installment plans or consumer loans - Cost: No cost at all. You must keep enough cash on hand to pay the full balance by the due date. The hard part is resisting the urge to spread out large purchases via installment plans. - In plain terms: Making minimum payments is not a discount — it is essentially a daily‑interest loan that works out to roughly 18% per year. Once you use this option, the interest‑free period ends immediately, and the unpaid portion of the balance accrues interest from that point onward. Always look at the annual percentage rate when comparing offers; regulators now require issuers to display this figure prominently, rather than just the daily rate. The minimum rate is exactly 0.7 times the maximum rate. - Benefit: Before 2020, credit‑card interest rates were capped: the maximum daily rate was 0.05% and the minimum was 70% of that cap. At 0.05% daily, the annual simple interest rate comes to 18.25%. Starting in 2021, issuers and cardholders can negotiate rates freely. After opting for minimum payments, the unpaid balance continues to accrue interest daily while the interest‑free period is lost. Authorities now demand that issuers clearly show the annual rate; you should base your decision on this figure alone (China, 2020 notice). - Evidence grade: C - Sources:中国人民银行 (2020). 关于推进信用卡透支利率市场化改革的通知（银发〔2020〕327 号）. - Notes: The 18.25% figure results from multiplying 0.05% by 365 without compounding; the actual rate would be higher if interest were compounded monthly. Some banks offer discounts, but you must refer to the annual rate listed on your own statement. If you truly cannot afford the payment, seek a lower‑rate loan from a reputable lender rather than letting minimum payments pile up. ### 8. Don’t give streamers tips, don’t make in‑game purchases, and don’t make impulsive buys - Cost: There is no cost at all. It only takes a few minutes to do three things: turn off automatic payment, set daily and per‑transaction limits, and remove any linked payment methods from the platforms. The hard part is resisting the urge to click those buttons right then and there. - In plain terms: On average, each gamer in China spends roughly 480 yuan per year on games, and that money is almost impossible to get back. Laws only require refunds for purchases made by minors without parental consent; adults have no such protection. The easiest way to stay on budget is to take preventive steps: disable automatic payments, set spending limits, and unlink payment options. - Benefit: This is a substantial expense. In 2024, China’s gaming market generated 325.783 billion yuan in revenue, serving 674 million players — an average of about 480 yuan per person (calculated by dividing total revenue by the player count). That money is largely unrecoverable. One exception exists: if a minor (a person with limited civil capacity) makes purchases without a guardian’s permission, courts must support the guardian’s request for a refund. No such rule applies to adults. Additionally, minors are legally restricted to playing online games only on Fridays, Saturdays, Sundays, and public holidays, and only between 8 pm and 9 pm each day (China, 2020‑2021). - Evidence grade: B - Sources:国家新闻出版署 (2024). 今年中国游戏市场收入超 3257 亿元创新高（中国音数协游戏工委《2024 年中国游戏产业报告》）. ；最高人民法院 (2020). 关于依法妥善审理涉新冠肺炎疫情民事案件若干问题的指导意见（二）（法发〔2020〕17 号，第 9 条）. ；国家新闻出版署 (2021). 关于进一步严格管理 切实防止未成年人沉迷网络游戏的通知（国新出发〔2021〕14 号）. - Notes: This is graded as B because no direct studies have measured exactly how much money can be saved by avoiding tips and purchases; we only have aggregate industry figures. Turning off automatic payments and setting limits are widely recommended practices, which would merit a C rating on their own. The exact wording of Articles 19 and 145 of the Civil Code is already quoted verbatim in Item 9 (about minors making in‑app purchases). This information is not financial advice. ### 9. When kids make in-app purchases or send gifts, parents can demand refunds for large sums spent by kids over eight if they never gave consent - Cost: There’s no direct monetary cost, but it does take time to gather evidence and negotiate with platforms. Most platforms initially refuse refunds but eventually comply. If talks fail, legal action becomes necessary — a process that can take months and requires paying attorney fees out of pocket. Thus, it’s far more efficient to compile all relevant documentation first and approach both the platform and China’s 12315 consumer hotline. The real challenge lies in getting the child to cooperate and share details. - In plain terms: Money spent by children over eight years old can be legally invalidated and refunded if the amount far exceeds what one would reasonably expect for their age and level of maturity, and if parents neither approved nor acknowledged the transaction. For kids under eight, any spending is automatically considered invalid, as they lack legal capacity to make such decisions. Even silence from parents is interpreted by law as a refusal to acknowledge the expense. - Benefit: Minors aged eight and older are classified as having limited legal capacity — meaning they may only engage in activities appropriate to their age and maturity level. Any financial transaction beyond that scope requires explicit approval or retroactive acknowledgment from a legal guardian. Conversely, children under eight are deemed completely incapable of independent decision-making; all actions must be handled by their guardians. In the absence of any affirmative response from parents, the law presumes they reject the transaction. - Evidence grade: A - Sources:全国人大 (2020). 民法典. 最高人民检察院转载全文. 第十九条：「八周岁以上的未成年人为限制民事行为能力人，实施民事法律行为由其法定代理人代理或者经其法定代理人同意、追认；但是，可以独立实施纯获利益的民事法律行为或者与其年龄、智力相适应的民事法律行为。」第二十条：「不满八周岁的未成年人为无民事行为能力人，由其法定代理人代理实施民事法律行为。」第一百四十五条：「限制民事行为能力人实施的纯获利益的民事法律行为或者与其年龄、智力、精神健康状况相适应的民事法律行为有效；实施的其他民事法律行为经法定代理人同意或者追认后有效。」「法定代理人未作表示的，视为拒绝追认。」 - Notes: The crux of success lies in proving that a child — not a parent — performed the transaction. Helpful evidence includes: transaction timestamps coinciding with school hours or times when parents are at work; device usage logs; chat histories and gaming records; and a direct statement from the child. There is no fixed monetary threshold defining “age-appropriate” spending — a few dozen yuan spent on game skins differs vastly from tens of thousands spent on virtual gifts. Prevention is far easier: set spending limits without requiring passwords, enable youth protection modes, and never disclose payment codes to children. For cases where parents themselves impulsively make such purchases, refer to the section titled “Avoid giving gifts to streamers, making in-game purchases, or acting on impulse.” ### 10. Teaching kids one key phrase: anyone who asks them to use a parent’s phone to enter verification codes is a scammer - Cost: There’s no cost involved. Simply explain these six types of scams to your child, then agree on this phrase: “If you’re scammed, tell me right away and I won’t scold you.” Also set a spending limit for cashless payments, enable teen mode, and never share the payment password with your child. The hardest part is resisting the urge to get angry if they actually fall victim to a scam. - In plain terms: Each of these six scams works differently, but they all end the same way: the scammer gets the child to use a parent’s phone to transfer money or read out verification codes. That’s why this single phrase is enough: anyone who asks your child to use a parent’s phone or read out verification codes is a scammer. Add this follow-up line too: “If you’re scammed, tell me right away and I won’t scold you.” Only if the child feels safe enough to speak up immediately is there any chance of recovering the stolen funds. - Benefit: The Quanzhou Anti-Fraud Center and Quanzhou Education Bureau identified six common scams targeting teens. Though their methods vary, they all culminate in the same action: getting the child to transfer money via a parent’s phone. First, fake offers for cheap gaming accounts and gear. One boy transferred 260 yuan privately, then the scammer told him “transactions by minors are against the rules and your account will be frozen,” and tricked him into clicking a “verification link” using his dad’s phone, which led to over 30,000 yuan being stolen. Second, “removing anti-addiction restrictions.” Scammers threatened “if you don’t transfer money, your parents will go to jail,” so the child used his mom’s phone to send 7,000 yuan. Official rules make it clear there are no “unofficial ways” to lift these restrictions. Third, fake refund offers for in-game purchases. Impostors posing as “official customer service” claimed refunds were possible if parents used Alipay to send gifts to a specific livestream; this resulted in 73,000 yuan being spent on gifts, after which the scammers cut off contact. Official guidance states “anyone asking you to ‘send gifts to get a refund’ is 100% a scam.” Fourth, impersonating classmates or teachers. Scammers hack accounts to send voice messages calling the child by name and asking for money. At the start of the school year, they also join class groups pretending to be teachers, posting “pay 500 yuan for school fees” with identical profile pictures and nicknames to real teachers, even enlisting “accomplices” in the group to confirm “I’ve already paid.” Fifth, fake fan group offers. Scammers lure kids into “celebrity fan groups” promising 888 yuan in cash prizes; first they ask for a 48.88 yuan “verification fee,” then threaten “since minors aren’t allowed to join, the platform will freeze 80,000 yuan and your parents will go to jail” — this led to 16,000 yuan being stolen. Official guidance stresses “real police officers or lawyers never contact minors online to investigate, nor do they ever ask parents to operate phones.” Sixth, fake low-price listings on second-hand platforms that lure buyers off the site for private transactions. The same materials also list three red lines kids must never cross: first, never lend, sell or rent bank cards or SIM cards, as using them to move illicit funds can lead to criminal charges that affect future college admissions or civil service exams; second, “mobile voice acting” gigs are illegal; third, “high-paying overseas jobs” often turn out to be traps where victims are held captive upon arrival (Quanzhou, October 2025). - Evidence grade: B - Sources:泉州市反诈骗中心 (2025). 开学第一课｜反诈是青少年的必修课，这 6 大陷阱一定要避开！（福建省公安厅转载） - Notes: This is graded B because the source materials provide detailed breakdowns of scammer tactics and specific case examples, but there are no statistics on overall incidence rates or the effectiveness of preventive measures. This is distinct from Item 9, where kids spending money on in-game purchases can request refunds under civil law. Funds stolen by scammers fall outside this scope and must be reported under Section 8, Clause 2 to freeze transactions; recovery depends on whether the money remains in the account. The core scammer line “you’ve broken the rules and your parents will go to jail” is a dead giveaway of fraud — explaining this to kids beforehand is far more effective than trying to question them after the fact. It’s also crucial to actually follow through on the promise “if you’re scammed, tell me right away and I won’t scold you.” In all these cases, kids’ reluctance to speak up due to fear of punishment was a key reason losses kept growing. For adult versions of impersonation scams and AI face-swapping tactics, see Section 8, Clauses 3 and 4 (core anti-fraud rules, and always hang up first if a transfer is requested). ### 11. Skipping extended warranties for electronics - Cost: There’s no upfront cost. The trade‑off is that after the warranty expires you’ll have to pay for any repairs yourself — though that scenario is relatively unlikely. - In plain terms: Extended warranties typically cost 10% to 50% of the item’s original price. The profit margin on these warranties is roughly ten times higher than that of regular merchandise. In 2003, Best Buy in the U.S. earned over half of its total profits from extended warranties, even though they accounted for only 3% to 4% of its overall revenue. That price gap is exactly the extra money you end up paying. - Benefit: Extended warranties are priced at 10% to 50% of the product’s original cost. Industry estimates cited in research show that the average gross margin on these warranties sits at 50% to 60%: for every 100 dollars spent on a warranty, 50 to 60 dollars become pure profit. This is roughly 18 times higher than the gross margin on ordinary goods. In 2003, extended warranties made up just 3% to 4% of Best Buy’s revenue yet generated over 50% of its total profits (U.S. retail data from the early 2000s). - Evidence grade: B - Sources:Chen T, Kalra A, Sun B (2009). Why Do Consumers Buy Extended Service Contracts? Journal of Consumer Research 36(4):611-623. - Notes: The gross‑margin figure comes from an industry estimate referenced in the paper (Business Week, 2004); it wasn’t measured directly by the authors. The calculations above apply to ordinary consumers who can afford a single repair bill. For people who rely on a single device and lack a backup, the calculation changes. Screen‑protection plans for phones must also be evaluated separately: first estimate how often you’re likely to drop the phone, then decide whether the premium is worth it. ### 12. Prefer generic drugs that have passed consistency evaluation and those selected in centralized procurement - Cost: No cost at all. When a doctor prescribes medication or you go to buy medicine, simply ask: “Is there a generic version included in the centralized procurement program?” - In plain terms: The second batch of centrally procured drugs saw an average price drop of 53%, with some drugs becoming 93% cheaper. As of April 2026, 11 procurement rounds have been completed, covering 490 different drugs. Asking for generic drugs from this program ensures you get the same ingredients at a much lower price. - Benefit: The national centralized drug procurement initiative resulted in a 53% average price reduction for the second batch, with some drugs dropping by as much as 93%. By April 2026, 11 rounds had been conducted, covering 490 drugs. A total of 1,695 drugs have either passed or are considered to have met consistency evaluation standards, accounting for roughly two-thirds of all commonly used chemical drugs in China (official data from 2020–2026). - Evidence grade: A - Sources:国家医疗保障局 (2020). 第二批国家组织药品集中采购和使用工作答记者问. ；国家医疗保障局 (2026). 国务院政策例行吹风会：健全全周期全渠道药品价格形成机制. ；国务院办公厅 (2016). 关于开展仿制药质量和疗效一致性评价的意见（国办发〔2016〕8 号）. ；国家食品药品监督管理总局 (2016). 关于发布普通口服固体制剂参比制剂选择和确定等 3 个技术指导原则的通告（2016 年第 61 号）附件 1、附件 3，海南省药品监督管理局转载. ；国家医疗保障局 (2024). 集采药品质量严格监管，企业检查和品种抽检两个「全覆盖」. ；国家医疗保障局 (2025). 医保部门、药监部门有关同志就集采药品相关问题接受人民日报健康客户端记者采访. - Notes: There is some debate: some claim that consistency evaluation only checks ingredients, not actual therapeutic effects. This is only partially true. The evaluation process involves giving healthy volunteers the drug and measuring its concentration levels in their blood over time; if those levels fall within 80%–125% of those produced by the original brand-name drug, it is deemed acceptable. For drugs where dosage variations can be dangerous, stricter criteria apply. Excipients—substances other than the active ingredient used for filling or coating—may differ from those in the original drug, as regulations only require identical active ingredients, dosage form, administration method, and therapeutic purpose. Consequently, consistency evaluation does not involve testing the drug on patients to gauge effectiveness; that is assessed through separate research. The National Healthcare Security Administration has conducted real-world studies involving 63 centrally procured drugs, nearly 100 top-tier hospitals, and over 300,000 patients; results consistently showed no difference compared to original brand-name drugs. For example, with metformin, the rate of achieving target HbA1c levels was 83.4% for generic users versus 78.9% for brand-name users; conversely, for fasting blood glucose control, generic users achieved a 83.8% success rate compared to 87.6% for brand-name users. In January 2025, some doctors claimed that centrally procured drugs failed to lower blood pressure, induce anesthesia, or treat diarrhea; investigations by healthcare authorities at seven Shanghai hospitals found these claims largely stemmed from hearsay and personal experience; one of the cited diarrhea medications had not yet been used in hospitals at the time. It was also acknowledged that nine problematic drugs were disqualified from the first nine procurement rounds involving over 1,600 products—six of these were imported drugs, including three original brand-name products, while three were domestic products. Two practical steps can be taken: first, original brand-name drugs remain widely available, as centralized procurement accounts for only 60%–80% of hospital purchases; patients can still obtain them at higher cost. Second, for chronic disease patients switching to generic drugs, it is vital to monitor blood pressure, blood sugar, and HbA1c levels regularly (as outlined in Section 16, point 3) rather than relying on subjective feelings; if results worsen, consult a doctor and report any adverse reactions—never discontinue medication on your own. ### 13. Once you set up family medical expense sharing in the yibao app, funds from your individual medical insurance account can be used to pay for your spouse, parents, and children’s medical care and medication - Cost: No cost at all. You can set up family medical expense sharing either through your local medical insurance app or by visiting a local medical insurance office. - In plain terms: After completing this setup, any money in your individual yibao account can be used to cover medical expenses and medication costs for your spouse, parents, and children. Without this setup, those funds remain locked in your account for your own use only. - Benefit: Funds in your individual medical insurance account can be used to pay for any out-of-pocket medical costs you, your spouse, parents, or children incur at designated medical institutions. They can also be used to cover out-of-pocket costs for purchasing medicines, medical devices, and other medical supplies at designated retail pharmacies. Additional plans are also in place to explore allowing these funds to be used to pay for basic medical insurance premiums for eligible family members. - Evidence grade: A - Sources:国务院办公厅 (2021). 关于建立健全职工基本医疗保险门诊共济保障机制的指导意见（国办发〔2021〕14 号）第（五）项：「个人账户主要用于支付参保人员在定点医疗机构或定点零售药店发生的政策范围内自付费用。可以用于支付参保人员本人及其配偶、父母、子女在定点医疗机构就医发生的由个人负担的医疗费用，以及在定点零售药店购买药品、医疗器械、医用耗材发生的由个人负担的费用。探索个人账户用于配偶、父母、子女参加城乡居民基本医疗保险等的个人缴费。个人账户不得用于公共卫生费用、体育健身或养生保健消费等不属于基本医疗保险保障范围的支出。」 - Notes: Many people have thousands of yuan sitting unused in their individual medical insurance accounts, while elderly family members often have to pay for medicines out of pocket. This setup is valid for the long term once completed. Most regions refer to this service as “family medical expense sharing”, and it can be set up directly through local medical insurance apps. There is a strict rule against using these funds for fitness activities, wellness services, or similar purposes. Using these funds to buy health supplements at pharmacies for cash payouts is considered insurance fraud. ### 14. Drinking boiled tap water instead of buying bottled water year-round - Cost: You only need to purchase a kettle. Boiling water takes a bit of time, plus there are minimal gas or electricity costs. - In plain terms: In Beijing, the first-tier water price works out to 0.005 yuan per liter. Bottled water, calculated at 1 yuan for every 500 milliliters, costs 2 yuan per liter — that’s a 400-fold difference. Tap water must meet mandatory national standards, so simply boiling it before drinking is sufficient. However, if the water source is contaminated or the water becomes foul-smelling and cloudy, a few extra minutes of boiling won’t fix the problem; you should stop drinking it and report the issue to authorities. - Benefit: The first-tier water price in Beijing is 5 yuan per cubic meter, which equals 0.005 yuan per liter. Bottled water at 1 yuan per 500 milliliters costs 2 yuan per liter — 400 times more expensive than tap water. Tap water must comply with the mandatory national standard GB 5749-2022, which was issued on March 15, 2022, and took effect on April 1, 2023. The National Disease Control and Prevention Administration oversees this standard (Chinese water prices in 2015 vs. the 2022 standard). - Evidence grade: C (controversial) - Sources:北京市发展和改革委员会. 居民用水价格表. ；国家市场监督管理总局 国家标准全文公开系统. GB 5749-2022 生活饮用水卫生标准. ；杭州市联合调查组 (2025). 关于杭州市余杭区部分小区供水异常调查情况通报（2025 年 7 月 23 日），新华网转载 ；杭州市余杭区人民政府. 余杭区 2025 年 4 月／5 月／6 月水源水水质监测数据（杭州余杭水务控股集团公开，检测单位杭州嘉澍环境监测有限公司，附件 PDF 表 1 第 24 项「粪大肠菌群」） 、、；公安部网络安全保卫局 (2025). 编造虚假「警情通报」，捏造「粪水」谣言，邵某豪被刑事拘留 - Notes: The controversy stems from the fact that “compliance” is assessed only for water leaving treatment plants and at pipe endpoints. When the water source or distribution network is compromised, these standards may be temporarily unmet. On July 16, 2025, the raw water entering the Renhe Water Plant in Yuhang, Hangzhou, had an unusual odor, causing tap water in parts of Renhe and Liangzhu to smell foul. Officials attributed this to algae decomposing under low-oxygen conditions, producing sulfur-containing compounds. After switching to a different water source, tests showed no traces of total coliforms or E. coli in the treated water, and all other parameters met GB 5749-2022 requirements. Seven officials were held accountable, all July water bills were waived, and free water filters were distributed. Yet, fecal coliform counts at this same water source had been rising for months prior to the incident: at the Yongsheng intake point on the Tiaoxi River, counts rose from 10 per liter in April to 7,300 per liter in May and 16,000 per liter in June — exceeding the GB 3838 Class III surface water limit of 10,000 per liter. Counts at Siling Reservoir and Mantoushan Reservoir also surpassed this threshold that month at 28,000 and 24,000 per liter respectively. Boiling water only kills microorganisms; it cannot remove foul odors or dissolved chemicals. If water smells odd or appears yellow or cloudy, stop drinking it, report it to your water provider and via 12345, and temporarily switch to bottled water — but don’t expect a few extra minutes of boiling to resolve the issue. These incidents are localized and occasional; local compensation was provided, so they do not justify buying bottled water year-round. Online claims about “incorrectly connected sewage pipes” are fabrications based on fake police reports; the poster has since been criminally detained (see Section 9). The 1 yuan per 500 milliliter price for bottled water is a hypothetical figure for calculation purposes; you should use actual local prices instead. Residents in older neighborhoods with substandard secondary water supply systems may install filters or buy bottled water only in such cases. Water prices vary by region, so the Beijing figure is merely illustrative. ### 15. Infrequent stock trading - Cost: There are no monetary costs. The real challenge is resisting the urge to trade whenever you see market news. - In plain terms: Among investors who trade most frequently, the average annual return is only 11.4%, while the overall market average for the same period is 17.9%. This gap of over 6 percentage points is almost entirely caused by the transaction fees incurred with each trade. If these fees are excluded, the returns of frequent and infrequent traders end up being quite similar. - Benefit: This study analyzed 66,465 household accounts at US discount brokerage firms between 1991 and 1996. The group of investors who traded most often achieved an annualized return of 11.4%, while the overall market average was 17.9%, and the average return for all households was 16.4%. On average, these households turned over 75% of their stock holdings each year, swapping out three quarters of their portfolio annually. The gross returns (before transaction fees) of frequent and infrequent traders differed only slightly, meaning the performance gap is largely driven by trading costs (USA, 1991–1996). - Evidence grade: A - Sources:Barber BM, Odean T (2000). Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. The Journal of Finance 55(2):773-806. ；An L, Lou D, Shi D (2022). Wealth redistribution in bubbles and crashes. Journal of Monetary Economics 126:134-153. ；同文作者公开的工作论文稿（2021 年 10 月，国内数字按它逐字核对）. - Notes: These data are from the United States in the 1990s. While the commission and stamp duty structures for A-share markets differ, the core principle remains the same: higher trading frequency leads to lower net returns. This information is not intended as investment advice. 〔2014〕 〔2014〕 〔2014〕 〔2014〕 〔2014〕 〔85〕 〔85〕 〔85〕 〔250000000000〕 〔250000000000〕 〔40000000〕 〔150〕 〔5166.35〕 〔0.5〕 〔0.5〕 〔880000000000〕 〔808000000000〕 〔254000000000〕 〔2012〕 ### 16. Don’t borrow money to invest, avoid leverage, and never buy assets you don’t understand - Cost: Zero expense. The hard part is resisting the urge to “borrow some cash to make extra profits” when the market is doing well. - In plain terms: When you use borrowed money to buy stocks, any drop below a set threshold leaves you unable to add more funds, so your positions get automatically sold off. The paper losses instantly become real losses, leaving you no chance to wait for the price to rebound. Regulatory rules state that people who have held an account for less than six months or whose average daily assets over the past 20 trading days are under 500,000 RMB cannot open margin trading accounts. This threshold alone makes it clear this tool isn’t meant for ordinary investors. - Benefit: Leverage essentially means borrowing money to make purchases, which also magnifies potential losses. After opening a margin account, the market value of your collateral may fall below the minimum maintenance margin set by your broker, which governs the assets you’ve pledged to them. If the value drops below this threshold and you fail to add more collateral to bring it back up, your positions get forcibly liquidated, with the broker selling them on your behalf. Paper losses turn into actual losses right away, with no window to wait for a price recovery. The same regulatory rules apply here: clients with less than six months of trading experience, insufficient risk tolerance, or average daily securities assets under 500,000 RMB over the past 20 trading days are barred from opening credit trading accounts. This requirement further proves it is not a suitable tool for regular investors (China, 2015). - Evidence grade: B - Sources:中国证监会 (2015). 证券公司融资融券业务管理办法（证监会令第 117 号，第十二条）. ；上海证券交易所. 《上海证券交易所融资融券交易实施细则》解读（投资者教育材料）. - Notes: There is no direct academic evidence supporting the advice “never buy assets you don’t understand”; this is widely accepted industry consensus, so it is classified as grade C. Using consumer loans or credit card cash advances for investing also counts as a form of leverage; their interest rates are covered in section 7 of this chapter (“avoid minimum credit card payments”). This content does not constitute investment advice. ### 17. Using broad-market index funds instead of actively managed funds as a long-term core holding (the portion of money you keep invested for years) - Cost: There is no direct monetary cost. The trade-off is that you give up the chance of picking a “star fund manager.” The harder part is that when the index drops, you must endure those losses too — you can’t simply sell out midway. - In plain terms: The collection of stocks held by actively managed funds already closely mirrors the overall market. Yet the extra management fees they charge are deducted straight from your actual returns. When we repeatedly re-randomize fund performance data to test how much luck plays a role, very few funds manage to generate enough outperformance to offset those fees. - Benefit: Collectively, U.S. actively managed equity funds hold a portfolio very similar to the broader market. However, their high management costs directly translate into lower net returns for investors after fees are deducted. This research used a bootstrap simulation method to repeatedly shuffle fund performance data and gauge how much could be attributed to luck alone. The results show that only a tiny fraction of funds achieve excess returns large enough to cover their fees (U.S., published 2010). S&P Dow Jones Indices conducts an annual review: in 2024, 65% of U.S. actively managed large-cap equity funds underperformed the S&P 500. Over a 24-year span, an average of 64% underperformed each year. In the 15 years ending 2024, no single fund category saw a majority of active funds outperforming their respective benchmarks. - Evidence grade: B - Sources:Fama EF, French KR (2010). Luck versus Skill in the Cross-Section of Mutual Fund Returns. The Journal of Finance 65(5):1915-1947. ；S&P Dow Jones Indices (2025). SPIVA U.S. Scorecard Year-End 2024. （官网拒绝自动抓取，数字按 2025-05-12 的存档核对：）；S&P Dow Jones Indices (2025). SPIVA Asia Ex-Japan Scorecard Mid-Year 2025（Report 1a，China Large-Cap 对 S&P China A 300 的跑输比例：1 年 60.5%、3 年 69.6%、5 年 50.8%）. （官网拒绝自动抓取，按存档核对）；Harvey CR, Liu Y (2022). Luck versus Skill in the Cross Section of Mutual Fund Returns: Reexamining the Evidence. The Journal of Finance, 77(3). （争议方） - Notes: Debate exists: one study re-examined this conclusion and argued that the original Fama-French methodology of repeatedly re-sampling data might be overly strict. Under that approach, even funds with genuinely strong outperformance could be classified as “no different from luck.” Thus, the claim that “almost no active funds possess skill” might be overstated. In China, the data is less one-sided than in the U.S. As of June 2025, S&P Dow Jones statistics show that for A-share large-cap active funds, 60.5% underperformed the S&P China A 300 Index over one year, 69.6% over three years, and 50.8% over five years. This dataset only covers up to five years, so longer-term figures remain unavailable. Consequently, while it is still uncertain whether active funds consistently underperform in China, the advantage of lower fees for index funds remains valid. This information does not constitute investment advice. ### 18. When picking similar funds, go for those with lower fees - Cost: There’s no upfront cost to pay. Before buying, just check how much the sum of the management fee, custody fee, and sales service fee comes to. - In plain terms: For every 1 percentage point increase in a fund’s annual fee, the amount you end up with after 20 years drops by roughly 18%, and after 30 years by about 26%. Among funds in the same category, picking one with lower fees is the only thing you can be certain of in advance. - Benefit: The difference in fees gradually erodes your principal through compound interest — that tiny amount deducted each year adds up over time. If a fund’s annual fee is 1 percentage point higher, the final value after 20 years will be roughly 0.99^20, or 18.2%, lower than it would have been otherwise; after 30 years, the drop is about 26%. Since 2023, China has rolled out reforms to fund fees, capping the management fee for actively managed equity funds at 1.2% and the custody fee at 0.2% for newly registered funds as of July 7, 2023. 136 fund companies have also lowered these fees for their existing products to meet these limits. - Evidence grade: C - Sources:中国证监会 (2023). 证监会有关部门负责人就公募基金费率改革答记者问. ；厦门证监局 (2024). 「新注册的主动权益类基金统一执行"管理费率不超过1.2%、托管费率不超过0.2%"的上限标准」. ；Fama EF, French KR (2010). 见第 11 条. - Notes: This calculation follows the standard formula and assumes both funds generate identical pre-fee returns. In reality, you’d also need to factor in subscription fees, redemption fees, and sales service fees for Class C shares. This information does not constitute investment advice. ### 19. Don’t put all your money into one stock, one platform, or one property - Cost: No cost at all. The hard part is accepting that you won’t always pick the single most profitable option. - In plain terms: As long as multiple assets don’t all rise or fall in perfect unison, spreading your money across them keeps your average expected returns the same, while reducing the ups and downs of your account balance. Conversely, if you invest all your funds in just one stock, platform, or property, any trouble with it directly impacts your entire portfolio. - Benefit: When several assets do not move in perfect lockstep, diversifying your investments maintains your expected returns while lowering overall volatility. This is the core conclusion of Markowitz’s 1952 portfolio theory, which has remained foundational for decades. On the other hand, putting all your money into one single stock or platform means its variance becomes your total portfolio variance — any rise or fall in its value directly affects your portfolio, with no other assets to offset losses when problems arise. - Evidence grade: B - Sources:Markowitz, H. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77–91. - Notes: This is rated as a B grade because the original academic paper relies purely on mathematical derivation, without providing concrete figures on exactly how much diversification reduces potential losses. Diversification can only lessen the fluctuations of your portfolio balance, it does not guarantee you won’t suffer any losses. Buying broad-based index funds (see item 17 in this section) is the easiest way to achieve effective diversification. This information is not intended as investment advice. ### 20. Individuals who pay income tax can open a personal pension account and deduct up to 12,000 yuan per year before tax; it is not worthwhile for non-taxpayers to do so - Cost: There is no fee to open the account. The real cost is that the funds remain locked until retirement — you cannot withdraw them during that time. - In plain terms: For every yuan you deposit, the tax you save equals your marginal tax rate minus 3%. If you contribute the full 12,000 yuan in a year, a taxpayer at a 10% rate saves 840 yuan, at 20% saves 2,040 yuan, and at 30% saves 3,240 yuan. Those who do not pay income tax gain nothing; they must also pay an additional 3% tax when withdrawing funds, resulting in a net loss. The money stays locked until retirement. - Benefit: The maximum annual contribution of 12,000 yuan can be fully deducted from your total taxable income — whether from wages or business earnings. Any investment returns generated within the account are exempt from personal income tax for now. When withdrawals occur, they are taxed separately at a flat rate of 3%. Thus, the total tax saving equals your marginal tax rate minus 3% multiplied by the actual amount contributed. For example, at a 10% marginal rate you save up to 840 yuan per year; at 20% the saving is 2,040 yuan, and at 30% it reaches 3,240 yuan. Non‑taxpayers receive no benefit now and must pay 3% tax later, making it a net loss. The annual contribution limit resets each calendar year; any unused portion cannot be carried over. This policy has been in effect nationwide since 15 December 2024. - Evidence grade: A - Sources:财政部、税务总局 (2024). 关于在全国范围实施个人养老金个人所得税优惠政策的公告（财政部 税务总局公告 2024 年第 21 号，2024 年 12 月 12 日）. ；人力资源社会保障部等五部门 (2022). 个人养老金实施办法（第七、八、九、十二、十三条）. - Notes: This account operates on a closed‑loop basis — once funds are deposited they cannot be withdrawn except under four specific circumstances: reaching the statutory retirement age, becoming completely unable to work, emigrating, or as otherwise stipulated by law. It is therefore not a typical investment vehicle but a long‑term tax‑saving arrangement. Before contributing, calculate how much extra tax you would pay per additional yuan earned to determine an appropriate amount. Avoid using emergency savings for this purpose (see Section 27). You must also select your own investment products; losses are possible. Selection criteria mirror those outlined in Sections 17 and 18 of this chapter — broad‑based index funds with low fees are preferred. Proof of deductions is issued by the Personal Pension Information Management Service Platform. You may elect to claim the deduction either at the time of payroll withholding or during the annual tax reconciliation process (see Section 2). ### 21. Paying for gym visits individually or on short-term plans is only worthwhile if you have a consistent attendance record spanning over a year - Cost: Buying passes individually ends up costing more per visit compared to an annual membership. You’ll need to honestly estimate how many times per month you actually plan to go. - In plain terms: According to three years of data from U.S. gyms, members who signed contracts with monthly fees exceeding $70 attended the gym just 4.3 times per month on average, which works out to over $17 per visit. Meanwhile, a 10‑visit pass costs only $10 per visit. Collectively, these members paid roughly $600 more over their membership period. Unless you’ve already been going to the gym regularly for at least a year, buying individual passes or short‑term plans is far more economical. - Benefit: This study analyzed three years of data from 7,752 members at three U.S. fitness clubs. Members opting for monthly plans costing over $70 visited the gym just 4.3 times per month on average, resulting in a per‑visit cost exceeding $17. In contrast, a 10‑visit pass costs only $10 per visit. Over the same period, these members ended up paying an average of $600 more than they would have with a yearly membership. Additionally, the proportion of monthly‑plan members who kept their membership for over a year was 17% higher than that of annual‑plan members (based on three years of U.S. panel data). - Evidence grade: B - Sources:DellaVigna S, Malmendier U (2006). Paying Not to Go to the Gym. American Economic Review 96(3):694-719. - Notes: This is just one study using data from the United States. Nevertheless, its underlying principle is universally applicable: people tend to overestimate their future self‑control. If you’ve already maintained a consistent routine of going to the gym at least twice a week for a full year, then an annual membership does prove to be the cheaper option. ### 22. Sign a written contract before paying a deposit; if a business faces risks, it must stop taking payments, and you have the right to get back any unused balance if it shuts down - Cost: No cost involved. The real challenge is insisting on a written contract on the spot — refusing any “pay first, talk later” offers. - In plain terms: Any business that accepts a prepayment from you must sign a written contract with you that clearly outlines how refunds will be handled. If a business runs into serious operational problems, it must stop collecting prepayments. Even if it plans to close or relocate, it must give you advance notice. At that point, you can either demand that it continue providing services or request a refund for any unused balance. Violating these rules results in fines for the business. - Benefit: The regulations require businesses accepting prepayments to sign written contracts that specify refund procedures. If a business faces major operational risks, it must cease taking prepayments. When a business decides to close or move locations, it must inform consumers ahead of time. Consumers have the right to demand continued service delivery or a refund for any unspent balance. Breaching these rules can lead to fines ranging from 1 to 10 times the illegal earnings; if no illegal earnings exist, fines up to 500,000 yuan may apply. - Evidence grade: A - Sources:国务院 (2024). 中华人民共和国消费者权益保护法实施条例（国务院令第 778 号，2024 年 7 月 1 日施行）. 第二十二条：「经营者以收取预付款方式提供商品或者服务的，应当与消费者订立书面合同，约定商品或者服务的具体内容、价款或者费用、预付款退还方式、违约责任等事项。」「经营者未按照约定提供商品或者服务的，应当按照消费者的要求履行约定或者退还预付款。」「经营者出现重大经营风险，有可能影响经营者按照合同约定或者交易习惯正常提供商品或者服务的，应当停止收取预付款。经营者决定停业或者迁移服务场所的，应当提前告知消费者……消费者……有权要求经营者继续履行提供商品或者服务的义务，或者要求退还未消费的预付款余额。」；第五十条罚则 - Notes: These regulations mainly serve as a basis for legal action after the fact — they cannot prevent issues beforehand. If a business actually shuts down, its funds are often no longer accessible. Therefore, it is advisable to follow the advice in this section to limit prepayments to small amounts via “pay-per-use” or short-term plans. In case of problems, you can then rely on these regulations to protect your rights. Article 27 of the same regulations also requires businesses collecting deposits to agree in advance on refund methods, procedures, and timeframes, and they cannot impose unreasonable conditions on refunds. ### 23. Implementing a 24-hour cooling-off period for non-essential big-ticket purchases; making full use of the seven-day no-questions-asked return policy for online shopping - Cost: No direct monetary cost. You simply have to wait an extra day to receive what you want. Usually, you’re responsible for return shipping fees. The real challenge is resisting the urge to place the order on the same day. - In plain terms: What you save is exactly the money spent on items you no longer want the very next day. For online purchases, you can return them for any reason within seven days of delivery. There are a few categories excluded from this policy: custom-made items, perishable goods, digital products that have been opened, and newspapers and periodicals. - Benefit: What you save is precisely that portion of impulse buys you no longer want after a day. There is no single universal percentage representing this share. As mentioned, online purchases can be returned within seven days of receipt, with the same exclusions applying. This policy has been in effect in China since 2017. - Evidence grade: C - Sources:国家市场监督管理总局 (2020 修订). 网络购买商品七日无理由退货暂行办法（总局令第 31 号）. - Notes: The cooling-off period is essentially a practical measure with no direct academic evidence backing it up. For purchases not deterred by this period, the seven-day no-questions-asked return policy still applies. Before initiating a return, make sure to verify two things: whether the item falls under the excluded categories, and whether its packaging remains intact. ### 24. Don’t fall for “strikethrough prices” or impulse buying during sales - Cost: Zero monetary cost. The trade‑off is that you might miss out on some genuine discounts. You’ll need to keep track of the regular prices of the items you buy most often. The real challenge is resisting the urge to stock up on the day of a sale. - In plain terms: When judging whether something is cheap or expensive, people rely on the first price they see; later adjustments rarely make up for that initial impression. Thus, a claim like “original price 999, now 499” makes us systematically overestimate how much we’re saving. By regulation, the baseline for a discount should be the lowest price at which the item actually sold in the seven days preceding the promotion; the crossed‑out price isn’t necessarily a real transaction price. - Benefit: Human judgment is anchored to the first price encountered, and subsequent corrections are usually insufficient. Consequently, statements such as “original price 999, now 499” inflate our perception of the discount amount. Official rules require that the reference price be the minimum actual sale price recorded in the same store during the seven days prior to the sale; the discount percentage must be calculated against that figure. The price marked through may never have been charged in reality (China, effective 2020). - Evidence grade: C - Sources:Tversky A, Kahneman D (1974). Judgment under Uncertainty: Heuristics and Biases. Science 185(4157):1124-1131. ；国家市场监督管理总局 (2020). 规范促销行为暂行规定（总局令第 32 号，第二十一条）. - Notes: The anchoring effect is a finding from laboratory studies; no one has quantified exactly how much money consumers lose by over‑buying. There are also hidden costs: items may expire, they take up space, and we tend to use them more simply because they’re on hand. Only purchase in bulk when all three conditions hold: a long shelf life, a definite need for the product, and a price genuinely lower than its usual cost. ### 25. It’s better to choose a non‑return insurance plan and treat any “refunds” or dividends as non‑guaranteed benefits - Cost: With a non‑return plan, no money is returned at maturity, which can make it feel like “wasted money.” You’ll need to handle your own savings. The hardest part is accepting that this money won’t be coming back. - In plain terms: The insurance company makes no promises about any dividends or refunds you might receive. Policy documents must explicitly state in bold text that “future policy dividends are non‑guaranteed benefits.” The extra premiums paid for return features essentially act as a savings account managed by the insurer; there’s no guarantee on returns, and withdrawals are difficult. - Benefit: Regulatory rules require that dividend‑type products clearly indicate in bold print that “future policy dividends are non‑guaranteed benefits, and their distribution is uncertain.” The dividend illustration is the projected payout table provided by the insurer; its maximum interest spread is 4.5% minus the policy’s guaranteed interest rate. This guaranteed rate is the fixed return stated in the contract. Premiums paid for return or dividend features function similarly to a savings account held by the insurer — with no guaranteed returns and limited liquidity; withdrawals are hard to arrange (China, effective 2023). - Evidence grade: C - Sources:中国银保监会 (2022). 一年期以上人身保险产品信息披露规则（银保监规〔2022〕24 号）. - Notes: While return‑type insurance can help people who struggle to save by enforcing regular payments, this advice applies mainly to individuals who can manage their own finances. Whether opting for a non‑return plan and investing the saved premiums is truly superior to buying a return‑type policy depends on the specific product; no systematic data are available to support this comparison here. This information is not financial advice. ### 26. Get sufficient third‑party liability coverage: the mandatory insurance limits are uniform nationwide and relatively low, so any excess must be paid out of your own pocket - Cost: Commercial third‑party liability insurance costs a few hundred to a few thousand yuan per year. The higher the coverage amount you choose, the cheaper the premium becomes per unit of coverage. - In plain terms: When you’re at fault, the mandatory insurance pays out only up to three specific limits: 180,000 yuan for death or disability, 18,000 yuan for medical expenses, and 2,000 yuan for property damage. These amounts cannot be combined or transferred between categories. Compensation for injuries often exceeds these caps, and any shortfall must be paid by you personally; therefore, it’s essential to purchase enough commercial third‑party coverage. - Benefit: Nationwide, mandatory insurance enforces uniform liability limits. These limits are calculated separately for four categories: death or disability, medical costs, property damage, and compensation payable when you’re not at fault. Following the 2020 overhaul of auto insurance, the total maximum payout is now 200,000 yuan, broken down as 180,000 yuan for death/disability, 18,000 yuan for medical costs, and 2,000 yuan for property damage. When you’re not liable, the limits drop to 18,000 yuan for death/disability, 1,800 yuan for medical costs, and 100 yuan for property damage. Any amount above these caps must be borne by the responsible party; drivers lacking mandatory coverage face vehicle impoundment and a fine equal to twice the unpaid premium. - Evidence grade: A - Sources:国务院 (2006, 2012 修订). 机动车交通事故责任强制保险条例（国务院令第 462 号，第 618 号令修改）第二十三条：「机动车交通事故责任强制保险在全国范围内实行统一的责任限额。责任限额分为死亡伤残赔偿限额、医疗费用赔偿限额、财产损失赔偿限额以及被保险人在道路交通事故中无责任的赔偿限额。」「责任限额由保监会会同国务院公安部门、国务院卫生主管部门、国务院农业主管部门规定。」第二十一条限额内赔偿；第三十九条未投保的「由公安机关交通管理部门扣留机动车……处依照规定投保最低责任限额应缴纳的保险费的2倍罚款」. ；中国银行保险监督管理委员会 (2020). 关于实施车险综合改革的指导意见（银保监发〔2020〕41 号，四（四）：「将交强险总责任限额从12.2万元提高到20万元，其中死亡伤残赔偿限额从11万元提高到18万元，医疗费用赔偿限额从1万元提高到1.8万元，财产损失赔偿限额维持0.2万元不变」）. （国务院公报） - Notes: These limits are set by financial regulators and may be adjusted over time. The figures cited reflect current values after the September 2020 reforms; it’s advisable to verify them before purchasing a policy. Crucially, mandatory insurance pays out per category separately — unused portions cannot be applied toward other categories. Compensation claims often surpass these caps, leaving drivers personally liable for the remainder. While this guide does not prescribe an exact coverage amount, it highlights how a modest additional outlay can safeguard you against a scenario with low probability yet potentially devastating financial impact. ### 27. Set aside an emergency fund equal to 3–6 months of living expenses in a readily accessible account - Cost: There is no direct monetary cost. The trade-off is forgoing higher returns; the funds must be kept in a checking account, money market fund, or any deposit account that allows immediate withdrawals. The real challenge lies in resisting the urge to dip into the fund while saving it up. - In plain terms: Keep 3 to 6 months’ worth of living expenses in an account you can withdraw from at any time. This way, if you lose your job or fall ill, you won’t have to borrow money at an 18% annual interest rate, nor will you need to sell your investments at a loss. Deposits in banks are protected by deposit insurance, which covers up to 500,000 RMB per bank in China. - Benefit: An emergency fund eliminates the need to borrow money or sell investments at a loss during unexpected events like job loss or illness. For details on the minimum annual interest rates for consumer loans and credit card payments, see Section 7 of this chapter (which advises against relying on minimum credit card payments). - Evidence grade: C - Sources:国务院 (2015). 存款保险条例（国务院令第 660 号，第五条）. - Notes: The recommendation to save 3–6 months’ worth of expenses is a widely accepted guideline, but no official or academic sources have been identified to support it, hence the C grade. The required amount should be calculated based on your regular monthly expenses, not your income. This information does not constitute investment advice. ### 28. Run a quick comparison before paying off your mortgage — don’t rely on gut feeling - Cost: No cost at all. It only takes about half an hour to do the math. You’ll need to honestly estimate the steady after‑tax return you can expect over the long run. - In plain terms: Paying off your mortgage is essentially the same as earning a guaranteed return equal to your mortgage rate. So the only question you need to ask is: can you reliably earn a higher after‑tax return than that rate? If the answer is yes, it makes sense to keep the money invested. If not, or if you’re unsure, paying off the loan is the better choice. With an equal principal‑and‑interest repayment plan, most of the early payments go toward interest; the earlier you pay, the more you save. Most bank apps have a “pre‑payment calculator” that gives you the exact numbers. - Benefit: The calculation works like this: let r be the annual mortgage rate as stated in your contract. As of 20 August 2026, the 5‑year LPR in China is 3.5%; the actual rate you pay is either higher or lower than this figure. Next, let g represent the after‑tax annual return you can expect from an alternative investment — the average percentage gain you’d earn each year by putting that money elsewhere. Paying off the mortgage guarantees you a return of exactly r; each dollar you apply to the loan earns you that rate for sure. If g consistently exceeds r, it’s better to keep the money invested. If g is lower than r, or if you can’t reliably predict it, paying off the loan locks in a risk‑free return equal to r. Again, because most of the early payments under an equal principal‑and‑interest plan cover interest, the earlier you pay, the more you save. This effect is clearly shown by the numbers produced by your bank’s pre‑payment calculator (Chinese rates as of 2026). - Evidence grade: C - Sources:全国银行间同业拆借中心受中国人民银行授权 (2026). 2026 年 8 月 20 日贷款市场报价利率（LPR）公告. - Notes: This section provides only the calculation method, not a definitive recommendation. It’s relatively rare for investment returns to reliably surpass mortgage rates. Regardless of which option you choose, be sure to keep enough cash on hand for emergencies. Also, check your contract for any prepayment penalties. This information is not intended as financial advice. ### 29. When shopping online, follow platform rules and laws — not influencers or “positive reviews” - Cost: There’s no cost involved. Just take a moment before ordering to read the return policy and deposit rules. After receiving your purchase, keep screenshots of the order, the livestream replay, and any chat records. The real challenge is resisting the persuasive atmosphere created by influencers. - In plain terms: If a seller cheats you, they must pay three times the amount you paid — with a minimum compensation of 500 yuan. Platforms that know sellers are breaking the law but do nothing must share in the liability. The maximum deposit allowed is 20% of the contract value; if you break the contract, that deposit is forfeited, but if the seller does, they must return double the amount. Organizing fake orders or fake positive reviews in livestreams is illegal, and algorithmic price discrimination based on personal data is strictly prohibited. - Benefit: Sellers found guilty of fraud must pay three times the purchase price, with a minimum payout of 500 yuan. Platforms aware — or reasonably expected to know — that sellers are violating laws must also bear joint liability, so you can seek compensation directly from them. Livestream hosts and platforms may not fabricate transaction volumes, follower counts, views, or likes, nor spread false information; doing so incurs civil liability. Those caught orchestrating fake transactions or reviews face fines up to 1 million yuan; repeat offenders may be fined between 1 million and 2 million yuan and even lose their business license. Deposits must stay under 20% of the contract total; if you breach the contract, that deposit is lost, but if the seller does, they must return double it. Using personal data for automated pricing decisions that result in unfair price differences — commonly known as “algorithmic price discrimination” — is illegal nationwide. - Evidence grade: A - Sources:全国人大常委会 (2013 修正). 消费者权益保护法（第四十四、五十五条）. （市场监管总局转载）；国家网信办等七部门 (2021). 网络直播营销管理办法（试行）（第十八、二十八条）. ；全国人大常委会 (2025 修订). 反不正当竞争法（第九、二十五条）. （全国社保基金理事会转载）；全国人大 (2020). 民法典（第五百八十六、五百八十七条）. ；全国人大常委会 (2021). 个人信息保护法（第二十四条）. （国家统计局转载）；山东省市场监管局 (2025). 六起网络不正当竞争典型案例. - Notes: There are no official comparative statistics available on which platforms offer the best value or minimize the risk of buying low-quality goods, so this book does not rank any platforms. The only publicly available data consists of general inspection results (see Section 32 regarding national inspection reports). Following the 2025 revision of China’s Anti-Unfair Competition Law, provisions on false advertising moved from Article 8 to Article 9, while related penalties shifted from Article 20 to Article 25; the new law took effect on October 15, 2025, so be sure to use the updated article numbers. In one case in Shandong, a company organized 75 fake transactions involving over 680,000 yuan; although the exact fine amount was not disclosed, the company was penalized. For information on seven-day unconditional returns, see Section 23 in this chapter (“Making the seven-day return policy work for you”). ### 30. If something goes wrong after buying from a livestream, first ask the platform for the seller’s and influencer’s details — they’re required to provide them - Cost: No cost involved; you simply need to request the information from the platform. - In plain terms: One of the biggest hurdles when problems arise from purchases made during livestreams is figuring out exactly who to hold responsible. In such cases, you can demand that the platform disclose the identity of the livestream operator and any associated influencers, along with their business records. The platform is legally obligated to comply with this request. - Benefit: When consumer disputes occur, operators of livestream marketing platforms must furnish buyers with the relevant details of both the livestream operator and any affiliated influencers, as well as all related business documentation. The primary obstacle in pursuing legal recourse in these situations is identifying the right party to sue; obtaining this information removes that barrier entirely. - Evidence grade: A - Sources:国务院 (2024). 中华人民共和国消费者权益保护法实施条例（国务院令第 778 号，2024 年 7 月 1 日施行）. ：「经营者通过网络直播等方式提供商品或者服务的，应当依法履行消费者权益保护相关义务。直播营销平台经营者应当建立健全消费者权益保护制度，明确消费争议解决机制。发生消费争议的，直播营销平台经营者应当根据消费者的要求提供直播间运营者、直播营销人员相关信息以及相关经营活动记录等必要信息。」「直播间运营者、直播营销人员发布的直播内容构成商业广告的，应当依照《中华人民共和国广告法》的有关规定履行广告发布者、广告经营者或者广告代言人的义务。」 - Notes: Before making any purchase, be sure to record both the livestream footage and any promises made by the host. Should any issues arise, first request the seller’s and influencer’s information from the platform before deciding whether to file a complaint or pursue legal action. This same regulation also outlines three additional requirements: first, merchants cannot unilaterally expand the list of items excluded from the seven-day no-questions-asked return policy; second, such exclusions must never be set as default options; and third, merchants are prohibited from denying returns without your explicit consent. ### 31. If you buy unsafe food, you can demand ten times the purchase price as compensation; if the amount is under 1,000 yuan, you’re still entitled to 1,000 yuan - Cost: There’s no cost involved. Keep the food, its packaging, and the receipt — don’t throw them away or wash them, and take photos right away. First try to negotiate with the seller or platform; if that fails, call 12315. Filing a lawsuit can take several months. The hard part is resisting the urge to discard the items first. - In plain terms: If you buy expired or spoiled food, the food itself, its packaging, and the receipt serve as evidence — so don’t toss them out. You’re entitled to compensation equal to ten times the purchase price or three times your actual loss; if that amount is less than 1,000 yuan, you still get 1,000 yuan. You may choose either the seller or the manufacturer to compensate you; the party you approach must pay first and cannot shift the responsibility to the other side. - Benefit: If you suffer harm due to food that fails to meet safety standards, you may seek compensation from either the seller or the producer. The party receiving your compensation request must assume primary responsibility and pay out immediately, without shifting liability. In addition to basic compensation, you can demand ten times the purchase price or three times your loss as punitive damages, with any amount below 1,000 yuan rounded up to 1,000 yuan. One exception applies: this does not cover cases where labeling or instructions contain minor flaws that do not affect safety or mislead consumers. Judicial interpretations set three key conditions: the purchase must be for personal or household use; the food must violate safety standards; and there must be no proof the buyer knew of those violations at the time of purchase. Only then can ten times the purchase price be claimed as punitive damages. Conversely, if a buyer knowingly purchases substandard food and then seeks compensation, courts will only support claims within reasonable household consumption limits. Repeated purchases or multiple lawsuits are evaluated as a single total amount. Certain labeling issues — such as irregular font sizes, typos, or non‑standard net‑weight indications — generally do not qualify for punitive damages provided they do not mislead consumers about safety. - Evidence grade: A - Sources:全国人大常委会 (2025 年第三次修正). 食品安全法（第一百四十八条）. （国家法律法规数据库，2025 年 12 月 1 日起施行）；最高人民法院 (2024). 关于审理食品药品惩罚性赔偿纠纷案件适用法律若干问题的解释（法释〔2024〕9 号，第一、六、七、八、十二、十三、十四、十五、十六条，2024 年 8 月 22 日起施行）. （最高人民法院公报） - Notes: The order of evidence matters more than the amount of compensation. Take photos and videos showing the packaging, production date, any foreign objects, and the purchase record before contacting the seller or platform; do not discard or wash the items beforehand. 12315 provides mediation, not binding rulings. If the seller refuses to cooperate, litigation becomes the only option — see Section 8, Article 22 for rules on small‑claims litigation involving online or second‑hand purchases. Whether foreign objects like hair or insects qualify as violations of food safety standards must be determined by regulatory authorities or through testing; simply finding hair in food does not automatically guarantee 1,000 yuan in compensation. For ordinary consumer fraud, triple compensation applies, with amounts under 500 yuan rounded up to 500 yuan — see Section 8, Article 29. Those producing and selling food must comply with licensing, labeling, and legal restrictions on health claims; details appear in Section 12, Articles 8–11. Finally, abusing compensation claims is prohibited: fabricating evidence of illegal production to extort payments constitutes extortion and may lead to criminal referral; similarly, filing lawsuits based on false premises may result in fines, detention, or counterclaims for defamation. This section applies specifically to individuals seeking protection for themselves and their families. ### 32. Check national inspection reports, 3C certification, and energy labels before buying big-ticket items - Cost: It costs nothing. Just spend a few minutes looking up information on the websites of the State Administration for Market Regulation and the Certification and Accreditation Administration. - In plain terms: In 2024, national inspections covered 25,250 batches of products, with 14.3% found to be non-compliant. The situation is worse on e-commerce platforms: out of 7,297 inspected batches, 23.5% failed to meet standards, compared to 15.1% of products sold in physical stores. Before purchasing any big-ticket item, take a few minutes to check the latest inspection reports and verify that the 3C certificate is genuine. Any product required to carry an energy label must have one. - Benefit: The 2024 national supervision inspections examined 25,250 product batches, resulting in a non-compliance rate of 14.3%. On e-commerce platforms, 7,297 batches were inspected, with a non-compliance rate of 23.5% — an increase of 1.8 percentage points from the previous year. Physical stores saw 8,055 batches inspected, with a non-compliance rate of 15.1%. The authenticity of mandatory product certification (3C) certificates can be checked via the “Certification Results” section on the Certification and Accreditation Administration’s official website. Energy labels are strictly regulated under product catalogs; they must include the energy efficiency grade, relevant metrics, and a unique identification code. Falsifying or misusing energy labels, or failing to apply them where required, is punishable under the Energy Conservation Law across China. - Evidence grade: B - Sources:市场监管总局 (2025). 关于 2024 年产品质量国家监督抽查情况的通报. ；国家认监委. 官网「认证结果」查询入口. ；国家发展改革委、国家质检总局 (2016). 能源效率标识管理办法（令第 35 号，第三、七、二十七条）. - Notes: These inspections involve regulators selecting a sample of products for testing; their results do not represent the overall market compliance rate, nor can they be used to rank online platforms. There are no studies quantifying exactly how many substandard products can be avoided by conducting such checks, which is why this item is rated B. The verification platform cx.cnca.cn used in this section was inaccessible during our checks; the correct entry point is the homepage at cnca.gov.cn. Inspection reports are updated annually, so always consult the most recent edition when referencing them. ### 33. Bracelets, jade, luxury watches, and collectibles should be judged by “how much you spend” rather than “how much you save” - Cost: There’s no upfront cost — just don’t justify buying these items by claiming they’ll appreciate in value later. The real challenge is resisting the urge to allocate extra budget for “preservation of value.” - In plain terms: A portion of the purchase price for such items is already consumption tax: watches priced at 10,000 yuan or more incur a 20% tax; gold, platinum, and diamond jewelry faces a 5% tax; other precious stones and jade incur a 10% tax, plus standard VAT. This tax cannot be reclaimed when you resell the item. If you truly love these items, treat them as a personal expense rather than an investment. - Benefit: On the purchase side, tax rates are clearly defined in the Consumption Tax Schedule: “luxury watches” are taxed at 20%. Within “precious jewelry and stones,” gold, platinum, and diamond jewelry incur a 5% tax, while other precious stones and jade incur 10%. “Luxury watches” are defined as any watch with a sales price (excluding VAT) of 10,000 yuan or more. On the resale side, the Pawnbroking Management Regulations apply: Article 36 limits pawn terms to a maximum of six months; Article 37 sets interest rates based on the six-month benchmark rate published by the People’s Bank of China, which cannot be deducted upfront from the loan amount. Article 38 caps monthly comprehensive fees for pawning watches or jade at 42‰ of the loan amount, plus an additional 4.2% monthly fee. For real estate mortgages, this cap is 27‰, and for property rights pledges it is 24‰. Article 40 states that if the pawner fails to redeem or renew the pawn within five days of the term’s end, the item becomes forfeited; Article 43 permits auctioning forfeited items valued at over 30,000 yuan, with proceeds first covering auction fees and loan principal plus interest, leaving any remainder to be returned to the pawner (or recovered from them if insufficient). - Evidence grade: A - Sources:国务院 (2008). 中华人民共和国消费税暂行条例（国务院令第 539 号，附《消费税税目税率表》）. ；财政部、国家税务总局 (2006). 关于调整和完善消费税政策的通知（财税〔2006〕33 号）. ；商务部、公安部 (2005). 典当管理办法（2005 年第 8 号令，第三十六、三十七、三十八、四十、四十三条）. - Notes: When pawning these items, remember that monthly comprehensive fees cap at 42‰ of the loan amount — equating to roughly 50% of the loan value over a year. This figure is a rough estimate derived by multiplying the monthly rate by 12, not an exact annual interest rate. While tax and fee rates are explicitly stated, there are no official statistics confirming long-term appreciation for such items; this guide makes no predictions or endorsements. The key point is to avoid treating personal purchases as investments: buying these items simply because you enjoy wearing them is perfectly fine, but adding budget based on hopes of future resale value is a recipe for financial loss. Gold also warrants separate consideration: investment-grade bullion traded by weight differs from jewelry sold by piece, which includes design and labor costs not recovered upon resale. Listed prices on secondhand platforms are not actual transaction values and should not be treated as market benchmarks. ### 34. For jewelry and gemstones, only test reports bearing the CMA mark are acceptable; you must also verify the issuing agency on the regulator’s official website - Cost: No cost at all. Checking an agency’s qualifications takes just a few minutes before placing any order. - In plain terms: Certificates can be forged, so what truly matters is confirming the agency that issued it. Any testing organization allowed to issue reports must hold proper credentials, and its reports must display the CMA mark. The regulatory authority publishes a list of certified agencies on its website, making it easy for consumers to confirm whether a given provider is on that list. In actual enforcement cases, some “national inspection certificates” accompanying goods were found to have been fabricated by unrelated parties. - Benefit: The relevant rules are laid out in the *Administrative Measures for Qualification Recognition of Inspection and Testing Agencies*. Article 2 states that qualification recognition is a licensing process for agencies that provide data and results with evidentiary value to the public; it involves a thorough review followed by issuance of certification. Article 15 specifies that the CMA mark comprises both the CMA logo and the corresponding certificate number. Article 21 requires any agency issuing such data to display this mark on all reports. Article 22 mandates that authorities publish all certified agencies and their current status online. Article 34 imposes a fine of up to 30,000 RMB on any agency operating without proper certification. Article 37 similarly penalizes up to 30,000 RMB any act of forging, altering, or misusing such certification marks. Real-world examples illustrate these rules: in June 2026, China’s State Administration for Market Regulation released typical cases of fraud in the traditional crafts market. One involved a livestream in Donghai, Jiangsu, where sellers claimed to offer “natural, unacid-washed, unprocessed Burmese A‑grade gems” and displayed a “national inspection certificate.” Laboratory tests, however, revealed the items to be dyed quartzite, treated jadeite, glass, and plastic; the certificate had been produced by a contact of the seller. Another case in the same county uncovered 469 suspected counterfeit crystal products; 210 proved to be natural crystal while 259 were synthetic. In Zhenping, Henan, a shop displayed a board claiming partnership with a “GIA CMA China Gemstone Testing Center” and sold 181 counterfeit “National Gemstone Quality Supervision Center” certification tags alongside bracelets nationwide. - Evidence grade: A - Sources:国家质量监督检验检疫总局 (2015 公布，2021 修改). 检验检测机构资质认定管理办法（第二、十五、二十一、二十二、三十四、三十七条）. ；国家市场监督管理总局 (2026). 市场监管总局公布一批传统工艺市场「打假清源」典型案例. ；国家标准化管理委员会. GB/T 16552—2017《珠宝玉石 名称》（现行，2018 年 5 月 1 日实施）. - Notes: China has established national standards for naming jewelry and gemstones. Test conclusions are often phrased as “quartzite (dyed)” or “jadeite (treated)”; the words inside the parentheses indicate the price difference. Terms such as “A‑grade,” “old‑mine,” and “unprocessed” are marketing buzzwords, not technical conclusions; the livestream mentioned earlier used exactly these phrases. Other deceptive tactics documented in these cases include faking mining sites, staging “miner” livestreams, deploying online trolls to hype sales, and inventing stories about urgent financial needs or family emergencies. Claims that products can “treat rheumatism, boost immunity, improve sleep, or clear blood vessels” are also deemed false advertising and are prosecuted accordingly. For larger purchases, the general verification method is outlined in Section 32 (checking sampling reports and 3C certification). Information on whom to contact when problems arise in a livestream is provided in Sections 29 and 30 (referring to platform rules and requesting data from the platform). ### 35. Random sales such as blind boxes and gacha games are treated as “money that won’t come back” - Cost: There is no direct cost involved. You simply need to set a strict budget before buying. The real challenge is resisting the urge to keep purchasing when you fail to get the item you wanted. - In plain terms: Sellers must display the draw rules, probabilities, and quantities of limited‑edition items in a highly visible manner. They are prohibited from manipulating results behind the scenes or offering empty boxes. While the guidelines encourage setting minimum guarantees and limits on spending and number of draws, they are not mandatory. For blind boxes purchased online, if the seller has clearly explained the terms and you have confirmed them, you cannot exercise the seven‑day right to return after opening the box. - Benefit: The basis for these rules is the “Guidelines on the Operation of Blind Box Business (Trial)”. Article 9 mandates that a list of key information be displayed prominently so consumers know it before buying. This information includes the product name, type, design, draw rules, distribution of items, quantity of limited items, draw probabilities, and the range of item values. The same article also forbids three practices: altering draw results or probabilities through backend manipulation, refusing or delaying delivery of items via cashbacks or exchanges, and producing empty boxes. Article 11 merely “encourages” operators to implement safeguards such as limits on draw time, spending, and frequency to promote rational consumption. Article 17 applies to blind boxes sold online; if the seller has fully informed you and you have confirmed the terms, the seven‑day return right does not apply after opening. Operators must not replace your explicit consent with pre‑checked boxes. Article 21 states that blind boxes must not be used as a guise for gambling. Article 23 prohibits sales to children under eight; for those aged eight and older, consent from a legal guardian must be obtained. - Evidence grade: A - Sources:市场监管总局 (2023). 盲盒经营行为规范指引（试行）（国市监稽发〔2023〕39 号，第九、十一、十七、二十一、二十三条）. - Notes: These guidelines serve as recommendations for operators and are not themselves a basis for penalties. In case of disputes, laws such as the Product Quality Law, Anti‑Unfair Competition Law, and Consumer Rights Protection Law apply. Specific grounds for complaints include failure to disclose probabilities, discrepancies between advertised and actual probabilities, and receipt of empty boxes. Before filing a complaint, record screenshots of the rules and the unboxing process. The exclusion of the seven‑day return right requires that the seller gave full disclosure and you confirmed it; default selections cannot substitute your consent. Additional rules govern sales to minors: no sales to children under eight, and for older minors proof of guardian consent is mandatory. Information on refunding mobile‑game micro‑transactions made by children can be found in section 9 of this chapter. The 24‑hour cooling‑off period for large non‑essential purchases is described in section 23. The cycle of “initial excitement fading into further purchases” is discussed in section 6, item 23. ### 36. If you care about what’s in your food, buy pre-packaged products: loose goods at retail counters aren’t legally required to list ingredients - Cost: No cost at all. Pre-packaged versions of the same items are usually a bit pricier than loose ones. Checking the ingredient list takes just a few seconds. - In plain terms: The law only mandates ingredient lists for pre-packaged foods; loose goods have no such requirement. For loose products, retailers only need to display the product name, production date, shelf life, and manufacturer details. So, the absence of any mention of additives does not mean they were not added — it simply means the law does not require them to be listed. If you care about what’s in your food, opt for pre-packaged versions where both the full ingredient list and additive details are clearly printed. - Benefit: Article 67 of China’s Food Safety Law stipulates that all pre-packaged foods must carry a label containing nine mandatory pieces of information. The second item on this list is the “list of ingredients or components,” and the seventh item is “the generic names of any food additives used, as defined in national standards.” Article 68 contains far fewer requirements for loose foods: it only requires retailers to display the product name, production date or batch number, shelf life, and the manufacturer’s name, address, and contact details on the packaging or container. There is no mention of ingredient lists or additives here. This distinction is most evident in frozen seafood products. GB 2760—2024 permits the use of phosphoric acid and phosphates as moisture retention agents — commonly referred to as water-retaining agents — in frozen seafood, with a maximum permitted usage level of 5.0 g/kg calculated as phosphate. Use within this limit is fully legal. The main issues arise from excessive usage and the practice of adding ice to increase product weight. Following a 2025 exposé by China Central Television’s 3·15 Gala, which revealed that some shrimp producers illegally added excessive amounts of water-retaining agents (composite phosphates) and added extra ice to boost weight, regulatory authorities mandated that all such products must clearly list water-retaining agents like phosphates, net weight (excluding ice coating weight), and full ingredient lists on their labels (this requirement applies nationwide, per the third 2025 amendment to China’s Food Safety Law, effective 1 December 2025). - Evidence grade: A - Sources:全国人大常委会 (2025 年第三次修正). 中华人民共和国食品安全法（第六十七、六十八条，2025 年 9 月 12 日公布，2025 年 12 月 1 日施行）. ；国家卫生健康委员会、国家市场监督管理总局 (2024). 食品安全国家标准 食品添加剂使用标准（GB 2760—2024，附录 A 表 A.1「磷酸及磷酸盐」项下食品分类号 09.02.01 冷冻水产品；A.3 规定表 A.1 列出的食品添加剂按照规定的使用范围和最大使用量使用）. ；六安市市场监督管理局 (2025). 关于水产制品及使用保水剂的相关企业提醒告诫函（2025 年 3 月 24 日）. - Notes: The fact that additives are not listed on a product does not mean they were not added — it simply means the law does not require them to be disclosed. If you want to know exactly what a product contains, always choose pre-packaged versions. For frozen shrimp, fish fillets, and similar items, the net weight listed on pre-packaged packaging already excludes ice coating weight; using this figure to calculate unit price gives a much more accurate cost estimate. For loose products priced by weight, the actual edible weight after thawing may drop significantly. Water-retaining agents are legal and not a safety hazard as long as they are used within permitted limits — do not mistake them for toxic substances. Excessive usage and added ice are purely commercial issues: you end up paying a premium price for mostly water content. Conversely, loose goods counters may also fail to display the four mandatory details required by Article 68: product name, production date, shelf life, and manufacturer contact information. Failure to display any of these constitutes a violation of the law. Consumers can choose not to purchase such products or file a complaint via the 12315 hotline. For business owners looking to sell packaged foods, specific labeling requirements are outlined in Section 12, Article 9 of this guide. This item delivers the highest level of benefit to both you and your family. ### 37. Stocks that have lost value should also be sold according to pre‑set rules — don’t try to even out costs by buying more - Cost: No cost at all. The hard part is admitting the loss and actually selling the stock. - In plain terms: Human nature drives us to sell winners and hold losers. In seven years of data from 10,000 U.S. accounts, stocks that rose were sold about 50% more often than those that fell. The same investors also tended to add to positions in losing stocks. Yet over the following year those unloved losers underperformed the sold winners by an average of 3.4 percentage points. - Benefit: This study examined every trade made by 10,000 accounts at a U.S. discount broker from 1987 to 1993. The proportion of profitable stocks sold (PGR) was 0.148, while the proportion of losing stocks sold (PLR) was 0.098 — a difference of 0.050 with a t‑value exceeding 35. In other words, rising stocks were sold more than 50% more often than falling ones. Investors also bought losing stocks more frequently: the re‑purchase rate for losers was 0.135 versus 0.094 for winners, again with a strong statistical significance. The data also contradicted the belief that “stuck stocks will eventually bounce back.” Over the next year, the excess returns of sold profitable stocks exceeded those of kept losing stocks by 3.4 percentage points. These excess returns represent performance above the market index. As a concrete illustration, selling $1,000 worth of a losing stock instead of a winning one would yield roughly 4.4% more return in the following year; this figure includes tax savings from the early sale under U.S. tax rules (1987‑1993). - Evidence grade: A - Sources:Odean T (1998). Are Investors Reluctant to Realize Their Losses? The Journal of Finance 53(5):1775-1798. - Notes: This point addresses the decision “to sell or not to sell”; point 15 (“avoid excessive trading”) deals with how often to trade — the two are not contradictory. Following a pre‑defined rule actually reduces the number of trades. Mathematically, buying more shares does lower the average cost per share, but treating this as a way to recover losses is misguided; it merely increases the amount of capital tied up in a single stock (see point 19, “don’t bet everything on one stock”). The tax calculations apply only to the U.S. system and cannot be directly applied in China; all other conclusions remain valid. The data originate from U.S. accounts in the 1980s‑1990s; trading costs and tax regimes differ for A‑share investors. This information is not intended as investment advice. ### 38. Planning to invest in overseas assets such as U.S. stocks? Use QDII funds or the Hong Kong Stock Connect program — don’t open accounts with foreign brokers, and don’t use your annual foreign exchange quota for buying foreign stocks - Cost: There’s no direct cost — you can purchase QDII funds via your own bank or brokerage app in just a few minutes. The trade-off is that the selection of available funds is more limited than at foreign brokers. - In plain terms: Starting May 2026, foreign brokers such as Tiger Brokers, Futu, and LongBridge are no longer allowed to accept new accounts from mainland investors. Existing account holders may only sell their holdings and withdraw funds within two years; no further purchases are permitted. Using your annual foreign exchange quota to buy overseas stocks is also prohibited; violators lose eligibility for that quota for the current year and the following two years. The only legal ways to invest in foreign assets remain QDII funds and the Hong Kong Stock Connect program. - Benefit: On May 22, 2026, eight Chinese authorities — including the China Securities Regulatory Commission, Ministry of Industry and Information Technology, Ministry of Public Security, People’s Bank of China, State Administration for Market Regulation, National Financial Regulatory Administration, Cyberspace Administration of China, and State Administration of Foreign Exchange — jointly issued a plan to comprehensively curb illegal cross-border securities, futures, and fund activities. The goal is to fully eliminate such activities within two years. Foreign firms may no longer market or solicit clients in China, nor provide services such as account opening, trade execution, or fund transfers. For current account holders, only one-way sales and withdrawals are permitted; after two years, all related websites, trading apps, and servers must be shut down. On the same day, the CSRC announced it would confiscate all illegal earnings of Tiger Brokers, Futu, and LongBridge and impose severe penalties. Official guidance stresses using legal channels such as the Hong Kong Stock Connect, QDII funds, and Cross‑Border Wealth Management Link for overseas investing. Meanwhile, the State Administration of Foreign Exchange explicitly states that personal foreign exchange may not be used for overseas real estate, securities investment, life insurance, or similar unapproved capital‑account purposes. Violators are placed on a “watch list,” lose their annual foreign‑exchange allowance for three years, face administrative penalties, possible anti‑money‑laundering investigations, and negative entries in their credit records (effective May 2026). - Evidence grade: A - Sources:中国证监会 (2026-05-22). 中国证监会等八部门联合印发《综合整治非法跨境证券期货基金经营活动实施方案》. ；中国证监会 (2026-05-22). 中国证监会有关部门负责人就《综合整治非法跨境证券期货基金经营活动实施方案》答记者问. ；中国证监会 (2026-05-22). 证监会严肃查处老虎等机构非法跨境展业案件. ；国家外汇管理局 (2021). 个人购汇申请书（附件 1）. - Notes: These regulations target foreign brokerage firms rather than individual investors; no penalties are specified for investors themselves. Those already holding accounts abroad need only sell and withdraw funds within two years. Each of the three legal channels has its own eligibility criteria — be sure to check with your bank or broker. Past strong performance of U.S. stocks does not guarantee future returns. When investing via QDII funds, follow the same principles outlined in items 17 (broad‑based index funds) and 19 (don’t concentrate assets in a single stock, platform, or market) — opt for diversified index funds rather than betting on one market. Separate limits apply to overseas cash withdrawals; see item 21.6 for details. This information is not investment advice. ### 39. Only buy insurance for losses your savings can’t cover; use an emergency fund for losses you can afford - Cost: No money is required. All you need to do is list the major potential losses your household might face and determine which ones exceed your savings capacity. This takes about half an hour. - In plain terms: The premiums you pay won’t all be returned to you; a portion goes toward the insurer’s operating costs and profit. Therefore, insurance is worthwhile only for rare events that would otherwise overwhelm your finances — such as serious illness, a car accident causing injury to others, or the death of a primary breadwinner. For smaller losses that your savings can handle, an emergency fund is the better choice. - Benefit: Only a fraction of the premiums collected by insurers is paid out as claims. The remainder covers sales, administration, and profit. Regulations require insurers selling short-term individual health plans to publish their “overall claims ratio” on their website every six months; this figure roughly indicates what proportion of premiums is paid out in claims. On average, buying insurance for any given loss ends up costing you a little extra over time. The upside is that it spreads a potentially catastrophic expense into a series of manageable annual payments. The smaller the loss and the easier it is for you to pay out of pocket, the less advantageous this trade-off becomes. Following this logic, several types of insurance mentioned earlier in this book are worth purchasing: one-year health insurance is covered in Section 7, Item 20; auto liability insurance for drivers is discussed in Item 26 of this section; overseas medical coverage is detailed in Section 21, Item 4; and term life insurance for households dependent on your income is explained in Item 41 of this section (nationwide, effective 2021). - Evidence grade: C - Sources:中国银保监会办公厅 (2021). 关于规范短期健康保险业务有关问题的通知（银保监办发〔2021〕7 号，综合赔付率按半年在公司官网披露）. - Notes: This recommendation is assigned a Grade C because no official statistics exist to determine precisely which policies offer good value. The guidance provided here is meant to help you make a reasoned choice. For low-cost risks — such as cracked phone screens or minor flight delays — you can easily cover the costs yourself, so these policies are generally unnecessary. Similarly, if your savings can sustain you for a year or two without income, you may opt out of critical illness insurance, which compensates for lost earnings during illness. Basic medical insurance is a mandatory social insurance program; it does not fall under this evaluation framework and must be purchased regardless, as explained in Section 7, Item 9. For smaller unexpected expenses, an emergency fund is the appropriate safeguard, as described in Item 27 of this section. Ultimately, the primary beneficiaries of this advice are you and your family. ### 40. If someone at home depends on your income, buy term life insurance for the breadwinner first — not for your kids - Cost: A few hundred to a few thousand yuan per year, depending on age, coverage amount, and policy length (this is a rough estimate by the author; no official figures exist). Be sure to disclose your health status truthfully before applying; the process takes about half an hour. - In plain terms: Term life insurance covers you only for a set number of years. If you pass away during that period, your family receives a payout. This coverage is meant to protect dependents who rely on your earnings — for instance, if your mortgage is still unpaid or your children are still young. If no one depends on you financially, this insurance isn’t necessary. Since kids don’t earn income, laws also limit how much death benefit can be paid for them. - Benefit: Regulatory definitions classify life insurance as personal insurance where human lifespan serves as the insured event; it includes term life, whole life, and endowment policies. Term life insurance pays out only upon the insured’s death within a fixed timeframe. Whole life insurance remains valid for the entire lifetime. Accident insurance only compensates for death or disability caused by accidents; it doesn’t cover deaths from illness and thus cannot replace life insurance. Contracts requiring death payouts must be approved and agreed upon by the insured; otherwise they’re invalid. Parents may purchase death coverage for minor children without such consent, but total payouts for a child’s death cannot exceed statutory limits. Typical coverage amounts reach 100,000 yuan, and another 100,000 yuan as well, hence the “high benefit” rating. No official recommendation exists for ideal coverage levels; the author’s calculation method adds remaining mortgage debt, projected expenses until children reach adulthood, and several years’ worth of household costs (based on national data revised in 2015). - Evidence grade: C - Sources:中国保险监督管理委员会 (2011). 人身保险公司保险条款和保险费率管理办法（保监会令 2011 年第 3 号，第八、十二条）. ；全国人大常委会 (2015 修正). 中华人民共和国保险法第三十三、三十四条. - Notes: This C rating stems from the lack of official guidance beyond basic definitions and payout limits; the “prioritize adults” recommendation follows logically from “whoever loses income would jeopardize household stability.” A child’s death doesn’t reduce household income, whereas losing the primary earner leaves mortgage payments and child expenses unpaid. When funds are limited, prioritize term life and one-year medical coverage for adults before considering similar coverage for kids. For details on truthful disclosures and guaranteed renewability, see Section 7, Article 20 (one-year medical insurance). The designated beneficiaries here fall under Category ②: your spouse and children. ### 41. Regretting a personal insurance policy signed for over a year? You can cancel it during the cooling-off period and get most of your premium back - Cost: There’s no cost involved. A quick call to the insurer’s customer service line or a short visit to a branch takes just a few minutes. The real challenge is staying calm after signing and taking the time to read through the contract within 15 days. - In plain terms: All personal insurance policies with a term longer than one year include a cooling-off period. For policies bought through banks, this period starts 15 days after you receive the policy document, and cancelling during this time incurs a maximum administrative fee of 10 yuan. After this window closes, you’ll only receive the portion of your premium that the policy allows you to reclaim, which is usually far less than what you originally paid. Insurers often make follow-up calls to check if you fully understand the terms — be honest if you’re still unclear. - Benefit: Regulations require all personal insurance policies with a term over a year to clearly state the start date and length of the cooling-off period, as well as the rights policyholders have during this time. The cooling-off period for long-term health insurance must be at least 15 days. For all such policies sold via banks, the contract explicitly sets this period to 15 days, calculated from the natural calendar days after you receive and sign for the policy document. The policy cover must also carry this notice: “You have the right to cancel this policy in full (minus a maximum administrative fee of 10 yuan) within 15 days of receiving it. Cancelling after this period will result in financial losses.” Even after the cooling-off period ends, you can still terminate the contract at any time, and the insurer must refund the policy’s cash value — the portion of your premium that can be reclaimed — within 30 days as per contract terms. Financial regulators note that cancelling long-term personal insurance after the cooling-off period typically results in cash value payouts that are lower than the total premiums paid. Insurers must also reach out to new policyholders of such plans during the cooling-off period to confirm they’re aware of the potential financial losses from cancellation and their rights under this period (applicable nationwide since 2010 and 2019). - Evidence grade: A - Sources:中国银保监会办公厅 (2019). 商业银行代理保险业务管理办法（银保监办发〔2019〕179 号，第三十六、六十七、六十八条）. ；中国银保监会 (2019). 健康保险管理办法（银保监会令 2019 年第 3 号，第十五条）. ；中国银保监会 (2022). 一年期以上人身保险产品信息披露规则（银保监规〔2022〕24 号，产品说明书要列明犹豫期的起算时间、天数和权利）. ；中国保险监督管理委员会 (2010). 人身保险业务基本服务规定（保监会令 2010 年第 4 号，第十五条）. ；全国人大常委会 (2015 修正). 中华人民共和国保险法第十五、四十七条. ；宁夏金融监管局 (2026-06-16). 关于防范非法代理退保的风险提示. - Notes: The cooling-off period is a mandatory provision for all personal insurance policies with a term longer than one year. There’s no such requirement for one-year medical or accident insurance policies, so you’ll need to check the specific contract terms for these. For policies not bought via banks, the exact duration is defined in the contract — be sure to look up the “cooling-off period” clause as soon as you get the policy. Savings and dividend-paying insurance plans require higher premium payments, so making use of this period is especially worthwhile for these policies; see item 25 in this section for more details on non-savings plans. We rate the benefit as “moderate” because the savings you can achieve are the difference between your total premiums paid and the cash value you receive, which typically ranges from a few hundred to a few thousand yuan — no official statistics exist on this figure. You are the sole beneficiary of this provision. ### 42. Before signing at the bank counter, check whether it’s a deposit or insurance - Cost: No cost at all. Just spend a couple of extra minutes reading the contract cover. - In plain terms: Banks may sell insurance on behalf of insurers, but they must not present it as a deposit. The contract cover must clearly state “Insurance Contract” and the insurer’s name in large print; terms like “deposit” or “savings” are strictly prohibited. If the insurer’s name appears on the cover, the money is not a deposit, and cancelling after the cooling-off period will result in losses. In principle, people aged 65 and older can only purchase insurance with guaranteed returns when buying at banks. - Benefit: Regulations explicitly forbid banks from bundling insurance with savings deposits, mutual funds, or other bank wealth products. They may not directly compare insurance returns to deposit yields, nor claim uncertain returns as guaranteed. Insurance documents and promotional materials must not use the bank’s name or logo, nor contain phrases such as “deposit,” “savings,” or “jointly offered by the bank.” The contract cover must display “Insurance Contract” in font size no smaller than 72 points and the insurer’s name in font size no smaller than 2 points. For three specific groups of customers, only insurance products with guaranteed benefits may be sold: applicants aged over 65; applicants aged over 60 purchasing installment-payment plans; and applicants whose annual income is below the local per capita disposable income. Policies for these groups must be manually underwritten by insurers rather than issued automatically at bank branches. Insurance agents are prohibited from selling insurance inside bank premises. For any insurance policy sold by a bank with a term longer than one year, a 15-day cooling-off period applies; cancelling after this period incurs financial losses. (Nationwide, effective October 2019) - Evidence grade: B - Sources:中国银保监会办公厅 (2019). 商业银行代理保险业务管理办法（银保监办发〔2019〕179 号，第三十、三十一、三十二、三十六、四十二、四十九条）. - Notes: This item is rated B because the regulations are very clear, yet no official statistics exist on how much money misled consumers have lost. Elderly family members are especially vulnerable to this issue when making deposits at banks; be sure to check the contract cover for them. If you’ve already signed such a contract, you may cancel it within 15 days per Section 42 (Cooling-off Period). For complaints regarding potential misrepresentation, refer to Section 44 (Assistance with Policy Cancellation). The primary beneficiaries of this guidance are you and your elderly relatives. ### 43. To cancel your insurance policy, contact the insurer directly — don’t use “policy cancellation agents.” If you feel misled, call 12378 for free assistance - Cost: There’s no cost involved. Simply call the insurer’s customer service line or visit a branch; this may require a bit more effort than using an intermediary. - In plain terms: Online ads promising “full policy refunds with no fees if unsuccessful” usually come from illegal cancellation agents. They typically take 30–50% of any refund amount and demand your ID, bank details, and verification codes. Once the policy is cancelled, coverage ends. If you feel misled, first contact the insurer’s customer service; if that fails, call 12378 — this service is completely free. - Benefit: In February 2026, China’s National Financial Regulatory Administration, the Cyberspace Administration, the Ministry of Public Security, the People’s Bank of China, and the China Securities Regulatory Commission jointly issued a warning. It stated that claims of “full policy refunds” are false and contrary to insurance laws. “Policy cancellation agents” charge hefty fees; if you try to withdraw from their services, they may sue you for “breach of contract.” They also collect personal data such as SIM cards, bank accounts, policy details, home addresses, and even children’s school information — data that can be sold on, leading to fraud or identity theft. A June 2026 notice from Ningxia’s financial regulator provides further detail: such agents demand 30–50% of the refund amount as a fee and impose steep penalties if you back out. They even instruct clients to fabricate claims of sales misrepresentation or forged signatures. Following such advice could violate public security laws; in severe cases, it may constitute slander or extortion. Once cancelled, coverage ends immediately. Future applications for similar policies may be rejected or cost more due to age or health issues. If you truly feel misled, first contact the insurer’s official customer service; if unresolved, call 12378. If you’re temporarily unable to pay premiums, ask the insurer about options like reduced paid-up value or policy loans. Reduced paid-up value means you stop paying premiums, though coverage decreases proportionally (nationwide, 2026). - Evidence grade: B - Sources:金融监管总局、中央网信办、公安部、中国人民银行、中国证监会 (2026-02-06). 关于警惕不法「代理维权」短视频及直播陷阱的风险提示（中央网信办官网转载）. ；宁夏金融监管局 (2026-06-16). 关于防范非法代理退保的风险提示. ；湖南金融监管局 (2025-07-23). 关于防范非法「代理退保」黑灰产的风险提示. - Notes: In 2025, Hunan’s financial regulator reported a case: a woman followed “advice” from a “friend” to use a cancellation agent, paying a “consultation fee.” Ultimately, her policy was refunded only at its cash value. Three months later, she was diagnosed with breast cancer — and no longer had critical illness coverage. You must weigh the pros and cons: if coverage remains valuable, consider reduced paid-up value instead of cancellation. If you’re still within the cooling-off period, see Section 42 (Cooling-off Period). Your own well-being is the ultimate priority. ### 44. Writing a specific beneficiary on the policy lets family claim the payout: 5 years for life insurance, 2 years for other policies - Cost: No cost involved. You fill this in once at purchase; any later changes to the beneficiary require written notice to the insurer. - In plain terms: If no beneficiary is listed, or if the named beneficiary passes away first, the payout is treated as part of the deceased’s estate and must first cover any debts owed by the deceased. If “Spouse: [Name]” is listed as beneficiary but the couple later divorces, the policy is effectively treated as having no beneficiary at the time of a claim. Family members must be aware of the policy’s existence: for life insurance, claims must be filed within 5 years of learning of the insured’s death; for other policies, the deadline is 2 years. In total, 100,000 people are affected by such situations, and another 100,000 face related complications. - Benefit: Insurance law stipulates that beneficiaries must be designated by either the insured or the policyholder, with the latter requiring the insured’s consent. In three specific scenarios, payouts are classified as part of the insured’s estate and distributed per standard inheritance rules: 1) No beneficiary is named, or the designation is ambiguous; 2) The named beneficiary dies before the insured, with no other eligible beneficiaries; 3) The beneficiary legally loses or voluntarily waives their right to benefits, again with no other eligible beneficiaries. If both the insured and beneficiary die in the same incident with no clear order of death, the beneficiary is presumed to have died first. Any payout classified as an estate must first settle all outstanding taxes and debts owed by the deceased, with remaining funds distributed to heirs. Supreme Court rulings clarify that if a beneficiary is listed only by name and familial relationship, any subsequent change to that relationship renders the designation invalid. Unnotified changes to beneficiaries hold no legal weight with insurers. The statute of limitations for filing claims is 5 years for life insurance and 2 years for other policies, both starting from the date the claimant learns or should have learned of the insured’s death. Given that typical life insurance payouts reach hundreds of thousands of yuan, this benefit is rated as “high” (national data, revised 2015, effective 2021). - Evidence grade: A - Sources:全国人大常委会 (2015 修正). 中华人民共和国保险法第二十六、三十九、四十一、四十二条. ；最高人民法院 (2020 修正). 关于适用《中华人民共和国保险法》若干问题的解释（三）第九条第二款第三项、第十条. ；全国人大 (2020). 中华人民共和国民法典第一千一百五十九条. - Notes: Once the statute of limitations expires, insurers may legally deny payouts, and legal action to recover funds is highly unlikely to succeed. For this reason, family members must at minimum know which insurers you hold policies with. After events like divorce, remarriage, or the birth of a child, update the beneficiary designation accordingly. To claim payouts after a death, follow the steps outlined in Section 25, Item 9 (claiming funds from multiple policies individually). Note that using the policy payout to settle the deceased’s debts is not a viable option; see Section 29, Item 13 (debt settlement) for further details. The beneficiary category for this item falls under Tier ②, which includes your spouse and children.