Life Insurance
There are two types of life insurance: Universal Life and Term Life.
Term Life is a basic policy with no savings element—it simply covers the risk of premature death. Statistically, one in four men aged 20 may not live to 65 (Swiss Re 2001), with men having higher premature death risks than women.
Term life insurance rates in Hong Kong and Asia are generally more expensive than in the U.S., partly due to less competition and the prevalence of whole-of-life and unit-linked policies, which are more profitable for insurers.
Since Term Life only covers a fixed term, there’s no guarantee a payout will ever occur.
For American expats in Asia, Transamerica HK no longer insures U.S. citizens, but local insurers may offer more competitive rates for smokers. However, their medical underwriting is often stricter, requiring exams and potentially more tests based on age and coverage levels.
Life insurers generally recommend having enough coverage to support family expenses for 7-10 years. In the U.S., the average coverage is around 3.5 times the annual salary.
Saving You Time & Money While Shopping For Insurance
AIA
Strengths
- Strong financial stability and a well-established presence in Hong Kong.
- Variety of product options including critical illness and health coverage add-ons.
- Offers a “Vitality Program,” which rewards customers for adopting healthier lifestyles.
Features
Offers options for estate planning and wealth accumulation.
Financial strength rating: AIA holds an A rating from S&P.
FWD
Strengths
- Competitive pricing compared to other major insurers.
- Focus on digital transformation with easy-to-use online platforms for customers.
- Flexible plans designed for wealth accumulation and protection.
Features
Offers a “FWD Care Recovery” plan which supports recovery from critical illnesses.
Financial strength rating: A3 by Moody’s and A by Fitch.
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Life Insurance Insights
Life Insurance & Covid
Life Insurance & Pre-existing Conditions
Life insurance and pre-existing medical conditions are often interconnected. When you apply for life insurance and have a pre-existing condition, several factors come into play:
- Underwriting Process
- Medical History
- Risk Assessment
- Policy Offerings
- Waiting periods and Exclusions etc
Life Insurance & Expatriates
Most life insurance plans allow an individual to move around the world with the same plan.
Life Insurance FAQs
A simple way to answer this is by asking: “Do I have anyone dependent on my salary to sustain their standard of living?” In other words, if you were to pass, would those still alive have issues covering the cost of your burial? Covering rent or mortgage payments and other bills? What about any remaining medical costs? Would they have enough money to cover those and still maintain their normal life? If the answer to any of these is “No, they wouldn’t,” then you should consider what life insurance options work best for you and your needs.
Remember, only do business with a licensed and well-reviewed insurance agent or company. Once you have an insurance agent or company who you feel confident doing business with:
- Decide how much coverage you need, for how long, and what you can afford to pay.
- Learn what kinds of policies will provide what you need and pick the one that is best for you. Visit our Choosing Life Insurance page for more details.
- Do not sign an application until you review it carefully to be sure the answers are complete and accurate.
- Do not buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy.
- Be sure to review your contract and understand exactly what is or isn’t covered. You can review our blog post, Understanding Your Insurance Policy for more tips on how to do this.
- When you buy a policy, make the check payable to the company, not the agent.
If you have just purchased a life insurance policy and then changed your mind about it, express this right away to your agent as you may be in your “cooling off” period. During this period, you are allowed no less than 21 days (with most insurers) from the date a life insurance policy was delivered to review and evaluate the policy. Should you elect to return the policy for any reason during the “cooling off” period, the insurance company must refund any premium you paid.
“Fully paid up” means, just that. You have made enough premium payments to cover the cost of insurance for the rest of your life.
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