Must See! Top 10 Truths You Need to Know Before Taking Out a Hong Kong Insurance Policy

Hong Kong Insurance 2024 Q1 figures are out!

According to the Hong Kong Insurance Authority, in the first quarter of 2024Mainland visitors to Hong Kong to take out HK$15.6 billion in insurance policiesyear-on-yearIncrease of 62.5%. Surpassing the 2016 figure for the same period (HK$13.2 billion) by 18.6%, the fireworks are overflowing!

As evidenced by the popularity of Hong Kong insurance, more and more investors are paying attention to Hong Kong insurance. However, many people encounter various problems and concerns when they consider buying Hong Kong insurance.

In this article, we're going to provide a superb dry run of theAnswers to Frequently Asked Questions about Hong Kong InsuranceWe will help you better understand and choose the right insurance product for you.

01

Is it legal for Mainlanders to take out insurance in Hong Kong?

Legal.

"According to the Insurance Companies Ordinance, Chapter 41 of the Laws of Hong Kong, it is lawful for any insurance company authorized in Hong Kong to promote life insurance in Hong Kong, regardless of whether the sales targets are Hong Kong locals, foreigners or Mainland Chinese." (Extracted from the Office of the Commissioner of Insurance's Reply File No. INS/ADM/7/1)

However, it should be noted that under this premise, the person himself should take out the insurance in Hong Kong and submit legal documents for entry into Hong Kong for registration, photocopying and filing, as well as verification by a person, so as to ensure that the place where the insurance is taken out is indeed a local place in Hong Kong.

02

How do I pay the premium for a Hong Kong insurance policy?

In Hong Kong, you can choose to open a bank account, you can pay bills through internet banking, transfer, telegraphic transfer, cashier's check, DDA automatic transfer, you can also swipe your credit card Visa, Master to pay your premiums and you can even choose to pay your premiums in cash.

03

Why are mainland premiums higher than Hong Kong's but returns are lower?

The difference in returns between mainland and Hong Kong insurance for the same deposit of $1 million:

What is the reason for such a large difference in returns?

On the one hand, the regulation of insurance companies in the Mainland is relatively conservative, especially in terms of setting more restrictions on investment, making it impossible for funds to be invested outside the Mainland; on the other hand, there are differences in the composition of fees and charges between insurance companies in the two places.

In contrast, Hong Kong insurance companies have higher quality business, are globally diversified and have broad investment portfolios. Hong Kong savings insurance can maximize the return for customers at an affordable level of risk, and therefore its rates and dividend policies are more advantageous in comparison.04The plans are not suitable for use within mainland China, what does this mean?

Hong Kong insurance contracts signed in Mainland China are invalid and not recognized. The purchase of Hong Kong insurance must be signed in Hong Kong and is protected by Hong Kong law.

05

Do insurance companies in Hong Kong run the risk of insolvency?

The Hong Kong government is very strict in the regulation of the Hong Kong insurance industry. For every sale, the Office of the Commissioner of Insurance of Hong Kong will require Hong Kong insurance companies to maintain the assets of the 80% value of the policy in Hong Kong in order to better protect the interests of the policyholders.

If a life insurance company in Hong Kong is not doing well and is on the verge of a crisis, the Hong Kong Government will step in and allow an insurance company with financial strength to merge with it, so as to protect the life insurance policies sold in Hong Kong from losses. The Hong Kong Government is also in the process of setting up the Hong Kong Life Insurance Reinsurance Fund to guarantee every life insurance policy sold in Hong Kong.

06

Do I need a medical examination to take out Hong Kong insurance?

It needs to be decided according to the type of insurance and the sum insured. Critical illness insurance and high-end medical treatment of Hong Kong insurance requires truthful health notification and complete medical information.

As for Hong Kong Savings and Participation Insurance, the requirements are more relaxed. For huge policies, health notification and proof of funds or income are required.

07

How can I check my policy information after my Hong Kong insurance policy has been in force?

Simply go to the website designated by the Division and enter your customer number and password to access your policy information online, and you can even change your mailing address, cell phone number, beneficiary, withdraw your policy value and other information directly online.

In addition, some insurance companies have special apps that can be downloaded and installed on your phone to check policy information anytime, anywhere.08What are the core strengths of Hong Kong insurance?

Compare the same amount of coverage with mainland insuranceHong Kong insurance premiums are cheaper, with higher returns, a wide range of coverage, lenient claim terms, more financial insurance benefits that can be passed on from generation to generation, and multi-currency insurance.

09

What information do Mainland visitors need to bring with them when taking out an insurance policy in Hong Kong?

Mainland customers going to Hong Kong to take out an insurance policy need to bring along their original identity cards, Hong Kong and Macau Travel Permits or passports.

For mutual insurance for husband and wife, you need the original marriage certificate or household register and go to Hong Kong together to sign the policy.

To insure a child, you will need the child's original birth certificate and an additional proof of survival.

For grandchildren's insurance, original proof of grandchildren's relationship is required, such as household registers, etc. Some insurance companies also require the parents to sign the original consent form for grandchildren's insurance, but the parents do not need to come to Hong Kong.

10

How to enjoy after-sales and claims service?

Hong Kong insurance companies do not require customers to travel to Hong Kong to handle claims and after-sales services in person. Clients can send their claim materials or other service needs to the company by post, and the company will pay the compensation directly to the clients after processing.

In addition, each customer has his or her own online service account, which can be used to check account data, view annual dividend payout letters and service information.

There are four main ways that customers can receive payment for their claims: check cashing, wire transfer collection, money order collection, and check collection.

As Mainland insurance pricing rates continue to fall, from an initial TP3T of 81 to a current TP3T of no more than 31, and are likely to fall further in the future. As a result, more and more investors are looking at Hong Kong insurance.

Hong Kong insurance is suitable for people or families with a certain degree of financial strength, a preference for long-term planning, a need for cross-border activities and a need for diversified asset allocation.

Given the current trends, locking in higher interest rates in advance and planning for them is the best option. Among financial products of the same risk level, theHong Kong Savings Participating Insurance (SPI) is undoubtedly one of the premium asset allocation choices as it excels in terms of profitability and safety.

If you are interested in Hong Kong insurance, please feel free to enquire!