Expat Insurance in Hong Kong

What is life insurance?

Life insurance is designed to provide support in the event that an individual suffers a serious illness, injury, or in extreme situations, dies. Many people will suffer from a serious medical situation at least once during their lives. When these situations happen, the burden place on you and your family due to the loss of income can be tough to cope with. A life insurance plan will provide you and your loved ones with the protection that you need in a time of crisis. In regards to this type of insurance there are 2 main categories, these are;

• Term Life Insurance

Term life insurance is designed to provide protection for your family over a specific length of time, usually between 5 and 35 years. Term Life plans will provide a cash benefit to a designated beneficiary should the policyholder die during the course of the plan. The benefit that is received from this type of plan is normally used to pay for children’s educational fees, outstanding mortgage payments, estate duties, funerary costs, and the financial relief of any additional beneficiaries that may have been named in the plan.

A Term Life plan will only provide financial compensation if the policyholder dies within the time stipulated by the plan. In some cases a term life policy can be linked to a terminal illness benefit, however, a term life policy will usually only provide monetary reimbursement should the policyholder die.

• Whole of Life Insurance

As the name suggests, Whole of Life Insurance is designed to protect an individual for their entire life. These plans are extremely flexible and will always offer a high level of cover. When applying for a whole of life plan it is important to think about any additional benefits that you would like to add to the plan. In many cases a whole of life plan will allow you a number of additional benefits including; critical illness, serious injury, hospitalization, and accidental death coverage.

Whole of life insurance allows you to accumulate a cash value on the plan through comprehensive investments. In many cases the plan will allow the policyholder to choose the funds that the money is invested in, giving you control of the plan. It is important that when you are purchasing a whole of life plan you look at all the available investment options, as these plans offer the policyholder the option of reclaiming the value of the policy should you ever choose to cancel it.

In many cases a whole of life plan will allow the policyholder to change their level of coverage should their situation change. Many of these types of plans will provide a range of specialists to help policyholders
understand exactly what their plan entails, and offer you the widest range of options available.

Is there anything else I should know about?

Some of the key elements that will appear in a number of different types of insurance plans are deductibles, exclusions, and claims. Home, Motor, and Medical insurance will always have deductibles and exclusions attached to a policy, while life insurance will usually only have exclusions. All types of insurance will have a way to make a claim.

• Claim; a claim is the financial demand for what is due. This is the process of obtaining reimbursement for an insured loss. To make a claim, generally you will need to complete a claims form and return this to the insurance company along with any additional information that they have requested such as; a motor vehicle inspection form, site survey, or doctors certificate. It is advisable to make photocopies of all relevant claims documents and send only the copes to the insurance company.

• Deductible; a deductible (or excess) is the amount of money that you pay towards a claim out of pocket. For example; if a plan’s deductible is $20 and the total claim is $100, then the policyholder will pay $20 dollars towards the claim and the insurance company will pay $80. In some cases and for some types of insurance the amount of deductible that a plan has can vary, it is important to know the deductible that is attached to any of your insurance plans.

In addition to this there are 3 types of deductible. These are annual, per claim or condition, and co-payment. It is important that you clarify and understand the deductible that is on your insurance plans

• Exclusions; Almost all types of insurance will have specific exclusions attached to the policy. As an example, the most common types of exclusions are; Acts of war, terrorism, nuclear and radioactive risks, and drunk driving. Exclusions can change between insurance companies and specific policies. It is important to know what, if any, exclusions your plans will have.

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