Accidents, Injuries, and Life Insurance
A common form of insurance that is often overlooked in Hong Kong (and elsewhere around the world) is Life Insurance. Recent reports in the South China Morning Post have highlighted that the sale of life insurance policies, overall, are down in 2022 – decreasing roughly 8.4 percent year-on-year through the month of August. While this could be due to turbulent market conditions and the impact a global recession will have on investment linked life insurance products, customers are not choosing to take up pure risk life insurance plans as an alternative.
Generally, there has been a reluctance to talk about life insurance in Hong Kong, possibly due to the morbid nature of the coverage – life insurance is, after all, designed to assist your family in the event that you die. But, opting not to include life insurance in your personal insurance tool set may be doing a disservice both to you, and to your loved ones in a worst-case scenario.
So, with that in mind and as you spend the next few weeks surrounded by your family, here is what you need to know about life insurance in Hong Kong.
Not all life insurance is the same
You have an exceptional range of choice when it comes to your life insurance protection in Hong Kong.
Just the Term Life Insurance umbrella includes an array of different options. From Level, Decreasing, and Increasing Term Life cover, to Renewable and Convertible Term Life Insurance, and Endowment Life Insurance. Then you get to Whole of Life, Universal Life and Non-Traditional Life (which includes things like annuities and pensions) and the possibilities become almost endless.
It is important to realize that not all these types of coverage will operate in the same manner. Some, like the simplest term life insurance products, are a straight forward swap of risk – if you die while the plan is in force then your beneficiaries will receive a financial settlement. Others, like Whole of Life Insurance, are more similar to an investment product – which require more management and involve a degree of speculation as the investment value accumulates.
At CCW Global we do not advise on, or offer for sale any Investment Linked Life Assurance Schemes.
We choose to focus on providing insurance coverage which is risk focused and not related to investing. This means that when it comes to your life insurance at CCW Global we generally talk about Term Life Insurance and the options associated with this type of protection.
Term Life Insurance in Hong Kong
Term Life Insurance is the simplest and most straight forward of all the life insurance options available to you in Hong Kong.
The way term life insurance works is like this: when you take out a policy the coverage is “active” for a predetermined length of time. This is known as the “term” of the policy. Should you die during the term of the insurance, when the policy is active, then the insurance company will pay a claim to any beneficiaries you choose to name. If you die outside the term of the insurance then no claim is paid.
Terms under this type of life insurance are typically obtainable in durations lasting 5, 10, 20, 30, and 35 years and present an extremely simple solution to ensuring that your loved ones or family have the finances they need to continue their standard of living following a traumatic event like your death. Further to this, Term Life Insurance is often more affordable than some of the other life insurance options you may have in Hong Kong due to the finite nature of the coverage.
The policy has a firm expiration date.
Yes, additional coverage can be obtained in exchange for re-underwriting, but in principle a Term Life Insurance plan will come to an end. This ensures that the risk is highly focused, and limits the chances of a claim being paid. As a consequence, the cost of term life insurance plans in Hong Kong is generally lower than the premiums associated with other forms of life insurance coverage.
A 30 year old with a 5 year Term Life Insurance policy will pay significantly less in coverage than a 60 year old with a 20 year term, simply because there is a lower chance of the 30 year old dying during the term they have selected. This ability to choose the term that works for you and pay only for the coverage you need is a significant advantage of this type of life insurance coverage.
As is the ability to expand your protection through coverage riders.
Accident Protection on Life Insurance
Many Term Life insurance products in Hong Kong can have attached coverage riders expanding the protection you receive for the duration of the policy term. In many cases, these riders can even be purchased on a standalone annually renewal basis if you did not want to take out a full-blown life insurance policy.
Personal Accident Coverage, Disability Income Protection, and Critical Illness Insurance are all great examples of supplemental forms of coverage that can either be added to a Term Life Insurance policy or purchased as an individual insurance plan. Again, the choice of whether to purchase any of these types of coverage is entirely up to you, but coupled with a Term Life Insurance policy give you a robust level of cost-effective protection against myriad common risks in the modern world.
From a car accident that left you permanently disabled an unable to work, through to a long-term, debilitating but non-fatal illness that requires serious management and care, there are many risks that you face every day that do not involve death, but which can be effectively and efficiently covered under a comprehensive life insurance plan. Opting to include extended accident benefits and coverage on your life insurance policy can be invaluable to your family and loved ones in a worst-case scenario.
Life and Accident Insurance in Hong Kong
While you have a range of choice for your life insurance and accident insurance protection in Hong Kong, some times there can be such a thing as “too much coverage.” If you don’t know where to go, or what protection you need, even starting your journey can be challenging.
At CCW Global our expert life insurance brokers work with you to tailor your insurance solutions so that you only pay for what you need. Our no-risk, no-obligation consultation process works to evaluate your needs, and empowers you to make the right decisions on your insurance coverage. At CCW Global we work to simplify your insurance, so let us help you and Contact Us Today!