Critical Illness Insurance Expands No-Disclosure Cover to Long-Term and Lifetime Policies
Summary
Waterdrop and Yuanbao are extending no-health-disclosure products into long-term critical illness and lifetime cover, widening access while shifting the test to pricing and claims.
Waterdrop Inc. (WDH) and Yuanbao Inc. (YB) said in September 2026 earnings calls that products for people with pre-existing conditions are moving beyond short-term medical insurance into long-term critical illness and lifetime specified-disease cover. Waterdrop reported RMB310 million of first-year premium from pre-existing-condition products in the quarter.[1][2]
Eligibility shifts from medical-history screening to risk pricing
Health declarations traditionally give insurers an initial risk filter: applicants disclose medical histories, and carriers can decline them, charge more, or narrow coverage. After Chinese regulators encouraged commercial health insurers to serve people with pre-existing conditions and rare diseases, carriers gained room to file products without that declaration. Distribution platforms still work with carriers to divide customers by disease, age, and use case and set different prices and terms.[1][2]
The important change is the duration and type of benefit. One-year medical products without health declarations already existed, including earlier products sold by Waterdrop. This cycle adds a long-term critical illness plan with five-year guaranteed renewability and lifetime specified-disease cover without health disclosure. Yuanbao launched a no-health-disclosure version of its million-RMB critical illness plan in May 2026.[1][2] Because carriers cannot screen high-risk customers out each year, disease segmentation, pricing, and claims data carry more of the risk-control burden.
Premium and distribution revenue are already rising
Waterdrop said pre-existing-condition products generated RMB310 million in first-year premium in the second quarter of 2026. Long-term first-year premium rose 33.4% sequentially, while insurance-related revenue increased 80.5% year over year to RMB1.33 billion.[1] Yuanbao's insurance distribution revenue rose 30.4% to RMB457.4 million as policy count increased, but the company did not disclose new-policy volume or average ticket size. The contribution from no-health-disclosure products therefore cannot be isolated.[2]
Huize Holding (HUIZ) provides a third case moving in the same direction. Its Changxiang 5.0 product extends high-end medical coverage to some customers with nodules and pre-existing conditions, while long-term health first-year premium rose 1.6 times year over year to RMB204 million in the first half of 2026.[3] This remains medical insurance rather than long-term critical illness cover, so it supports broader access but does not show that every category has crossed the same threshold.
Claims performance will determine the economics
Online distributors may see policy volume and commission revenue first because people previously blocked by medical history can now be segmented and insured. Industry reporting estimates that roughly 400 million people in China have pre-existing conditions and that impaired-life insurance reached RMB12 billion in 2024, up 50%. That is still a small market beside nearly RMB1 trillion of commercial health premium.[4]
The durable value depends on whether carriers price known morbidity correctly. Waterdrop management said the approach is not an abandonment of underwriting but a segmentation of disease risk. If higher premiums do not cover adverse selection, additional premium can become higher claims and reserve pressure.[1] Investors should watch first-year premium from impaired lives, long-term renewal rates, and carrier health-loss ratios together rather than distribution revenue alone.
Companies exposed to the change
- ZhongAn Online (06060.HK): The carrier already underwrites mid- and high-end medical insurance for people with pre-existing conditions. A broader customer pool can add premium, but claims remain on its balance sheet.[5]
- Shouhui Group (02621.HK): More than 99% of its revenue is tied to first-year commissions from online long-term life and health policy sales. Easier eligibility could widen that commission base, but the company has not disclosed an impaired-life product, so the link remains unconfirmed.[6]
Sources
[1] Drillr · Waterdrop Inc. · 2026-09-08 · FY2026 Q2 earnings call
“This is not simply losing any writing. It is segmenting the disease risk and building depreciated in writing and claims.”
[2] Drillr · Yuanbao Inc. · 2026-09-10 · FY2026 Q2 earnings call
[3] Drillr · Huize Holding · 2026-08-20 · H1 2026 earnings call
[4] 21st Century Business Herald · Impaired-life insurance market report · 2026-05-25 · https://www.21jingji.com/article/20260525/herald/4c10f382ad2b892479fff4050684e5a6.html
[5] Wuhan Local Financial Administration · ZhongAn mid- and high-end medical insurance report · 2026-03-13 · https://jrj.wuhan.gov.cn/ztzl_57/xyrd/bxy/202603/t20260313_2739362.shtml
[6] VBData · Shouhui Group business and prospectus review · 2025-05-31 · https://www.vbdata.cn/1519023089
This material identifies potentially overlooked industry changes and companies. It is not a stock recommendation.