China's growing middle class -- soon to become the largest in the world -- will profoundly change the world of consumerism. It's ready to buy a host of previously unattainable goods and services, including insurance.

(To find out about one particularly interesting Chinese insurance company, click here.)

According to a recent Ernst & Young survey of 2,000 middle- to upper-income Chinese, 80% of respondents cited China's serious pollution problem as a major health concern. And 93% of those surveyed didn't think they had good enough insurance coverage.

Overall, Chinese are worried about the cost of getting sick and see the basic government insurance plan as minimal at best. People fear that their lives could plunge into financial ruin from a debilitating health problem.

Over the next five years, the number of middle-class Chinese citizens is expected to reach at least 550 million. The largest growth segment within the middle class will be the "upper middle class." Compared to the "mass middle class," this group makes and spends a lot more money.

With so many Chinese concerned about the state of their country's health care service, those that can afford it (and the number of people who can is growing) will buy health insurance.

China's Public Health Care System Isn't Cutting It

Like many state-run health care systems around the world, China's public health care system can't meet the country's needs. Ninety-seven percent of China's population is covered by public health care, and costs are on an upward trend. There are also major differences between plans. And even when Chinese have access to public health care, many must foot a lot of the bill themselves.

There are government hospital subsidies, but these are insufficient to cover most medical expenses. To cover rising medical costs, hospitals make patients pay extra through overpriced drugs, the overprescribing of medications, under-the-table arrangements and other inefficient and dangerous measures.

To make the problem worse, China's aging population will further burden an already strained health care system. A large number of elderly people, in proportion to the total population, means higher medical costs. Currently, around 16% of Chinese are older than 60. That figure is expected to grow, as China's population gets a lot older, fast. By 2050, 25% will be age 65 and older. And 50% will be age 45 and older.

Private Health Insurance to the Rescue

A failing public health care system and an aging population may be a problem for China's government. But private health insurance providers see these challenges as a golden opportunity -- especially because China's growing middle class can now afford to buy more insurance.

Premiums written by China's life insurance industry grew by 48% year over year during the first seven months of 2016, as shown in the graph below. Health insurance played a significant role in the sector's growth.

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Rising Interest Rates Will Boost Profits for Health Insurance Companies

Fast growth in premiums collected by insurance companies is immediate cash in hand. They can use this cash to pay the bills, pay out claims and invest to earn income. And rising interest rates will help them earn even more money.

The amount of money an insurance company makes doesn't depend solely on collecting premiums. It also depends on how much of a return it can get from investing the cash earned from premiums. Most insurance companies invest that cash in very safe ways, typically in fixed-income securities, like bonds.

The returns earned on their bond portfolios varies with interest rates. If interest rates are low, insurance companies earn less. And if interest rates are high, they earn more.

Global bond yields have been rising since the election of Donald Trump as U.S. president. At the same time, global bond prices have tumbled. That's because bond prices move inversely to interests rates -- as bond prices fall, yields rise.

Bond yields in China have been rising too. The yield on China's 10-year bonds is now at a five-month high of 2.9%. If bond yields continue to rise, Chinese insurance company profits will soar.

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How You Can Profit From China's Health Insurance Boom

Considering the state of China's public health care and a wealthier, growing middle class that's very concerned about its health, it's inevitable that the health insurance sector in China will grow.

We've just released a presentation about one insurance company that's positioned exceptionally well in the Chinese market -- and its share price is just starting to go up. Find out more about this great opportunity by clicking here.

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Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.