7 minute read
Insurance
What is life insurance? What is life insurance? Life Insurance – A Life Decision
In legal terms, life insurance is a contract between a policyholder and insurer, where the insurer pays a specified sum to the insured’s family upon his/her death. The life insurance sum is paid in exchange for a specific amount of premium that has been paid in advance, over time.
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More practically, life insurance is designed to minimize the impact of the economic loss your family may face upon your demise. It provides replacement income and security for your loved ones after you are gone. For breadwinners, one of the biggest assets they provide their family is income, so continuation of this very income is important.
In short, life insurance
Moreover, you can live assured that wealth preservation is already taken care of for the next generation.
Life is beautiful, but also uncertain. The only certainty in life is death, and it pays well to insure it in advance.
Types of life insurance
There are so many options available like Traditional, Universal, Investment Linked, Jumbo Life, but I prefer two main types of life insurance.
1. Term Life Insurance offers protection for short-term only, i.e., it is a temporary insurance for a period usually between 1 and 30 years. If you stop paying premiums, the insurance stops. These policies pay out if you die during the term of the policy. The premiums payable are more reasonable, and the policy does not build cash value over time. 2. Whole Life Insurance offer protection for your whole life. They intend to protect your loved ones permanently, as long as you continue to pay your premiums.
There are many different payment options, such as paying yearly with a limited pay period of 10-20 years. Many of these policies accumulate cash values and dividends over time.
INSURANCE
How much life insurance do you need?
The answer to this question depends on your income and the protection your family needs. The goal is to develop an insurance plan that compensates for the loss of your economic contribution. It is always better to cover on the higher side. You should work with a reputable insurance intermediary who can help determine the amount of life insurance you need, by considering: • Is it a back-up plan for life, i.e., being prepared financially under any and every circumstance. It ensures that your family receives financial support in case you are not able to bring in the income yourself. • Replacement income need, i.e., the financial contribution you expect to make toward your family from now until retirement. It broadly should take into account salary, company benefits (if any, such as medical insurance), retirement savings, etc. • Survivor needs analysis, i.e., the amount of income needed for your family to maintain a desired level of income and lifestyle. • Inflation, i.e., protection value should be adjusted for inflation.
It’s never too early to start thinking about life insurance and get the financial security you and your family need and deserve. It is better buy insurance while you are young and don’t need it because when you do need it, it’s too late and you cannot get it.
Buying and claiming life insurance in Hong Kong
Hong Kong has over 150 authorised insurers, out of which over 70 companies are licensed to provide long- term insurance, such as life insurance. Hong Kong is the insurance hub of Asia!
Life insurance should be purchased via a trustworthy insurance intermediary, either a broker or agent, who can help you determine what type and amount of protection is needed. Above all, choosing a reputable insurer that provides a good product and excellent service is of utmost importance.
In the event of a claim, life insurance is one of the most liquid assets to which your beneficiaries will have access, especially if there are any outstanding debts in your name. Most insurers are able to pay within 30 days for straightforward claims. While other fixed assets may take significantly more time to liquidate, life insurance liquidity ensures additional peace of mind.
Lal & Insurance
I have been in the insurance industry for four decades and have witnessed it’s exponential growth in Hong Kong over this time. The Million Dollar Round Table (MDRT) has bestowed upon me their life membership, one of the highest accolades one can receive in insurance. The industry continues to develop and change, and we continue to grow with these developments.
I believe my brand is my name and I stand behind it with values of:
• Expertise – to provide customised quality insurance solutions based on client needs.
• Integrity – commitment to serve clients in a highly professional and ethical manner.
• Care – understanding clients’ concerns and supporting them in times of need. Lal’s Insurance Brokers Ltd. T: +852 2850 5666 | F: +852 2851 7061 E: lal@lals-insurance.com | www.lals-insurance.com 5/F, Wah Yuen Building,149 Queens Road Central, Hong Kong
香港中環皇后大道中 149 號華源大廈 5 樓
Useful References
HSBC via AXA
Website: https://www.hsbc. com.hk/insurance/products/ home/helper/ Tel: (852) 2233 3000
AIA
Website: https://ishop.aia.com. hk/en/general-insurance/ domestic-worker-protector. html? Tel: (852) 2232-8888
AIG
Website: https://www.aig.com. hk/personal/domestic-workerprotection? Tel: (852) 3555 0000
Cigna:
Tel: (852) 8100 3975 Website: www.cigna.com.hk/
Motor vehicle users must insure liability for bodily injury or death of third parties. The Special Administrative Region (SAR) government in Hong Kong is mandated to the issuance of Third-Party Risks concerning the Motor Vehicle Insurance. Under Hong Kong law, it is mandatory for every vehicle to be insured against liability for bodily injury or death to third parties. The minimum coverage required by law on a Third-Party Policy is HK$100,000,000 for any one event resulting in death or bodily injury.
The insurance covers several things, such as personal accident coverage of the driver or owner, damage or loss of the insured car, and/or third -party liability for death or bodily image. Most insurance firms in Hong Kong provide a comprehensive package. The policy helps to protect the car, passengers, and the driver or owner from risks while on the road.
Types of Car Insurance
There are three major types of car insurance in Hong Kong.
1. Comprehensive Motor Insurance
It covers car damage or accidental loss and all losses to third parties.
2. Third-Party Liability Insurance
It covers property damage for third parties, including the minimum legal requirements for death or bodily injury of third parties.
3. Act only Insurance
It covers only the death and bodily injury of third parties. It is the minimum requirement for the car to be permitted to operate on the road.
Hong Kong has attracted the majority of the leading insurance firms in the world. Therefore, the city has one of the most advanced insurance markets.
a. Life Insurance It includes China Life, AIA International, Prudential, and HSBC Life
b. Non-life insurance
It includes Bupa, Zurich Insurance, Local CTPI Hong Kong, and AXA General. Further details on insurance forms and motor insurance can be accessed at www.hkfi.org.hk
Benefits of car insurance
Car insurance helps in protecting against the likely damages to a car, despite being a requirement in regulatory laws. Additional benefits are a. Protects against legal liability involving third-party car accidents b. Covers damage or loss of car with sometimes free depreciation for repairs of new vehicles c. Replace an old car that has suffered complete loss because of accidents or theft. Replacement can either be for the same model or make of car. d. Protection with No Claims Discount (NCD) e. People enjoy safe driving in the knowledge that a third party is covered using comprehensive insurance covers.
Useful Reference:
AXA
Website: https://car.axa.com.hk/ Tel: (852) 2867 8688 Email: axa.direct.gi@axa.com.hk
HSBC via AXA (Third party)
Tel: (852) 2233 3000 Website: https://www.hsbc.com. hk/insurance/products/car/
Zurich
Website: https://www.zurich.com. hk/en/individuals/motor-insurance Tel: (852) 2903 9391
AIG
Website: https://www.aig.com.hk/ personal/auto Tel: (852) 3666 7033
Blue Cross
Website: https://www.bluecross. com.hk/en/motor-insurance/ Information Tel: (852) 3608 2988
Buying travel insurance becomes necessary in order to travel without worrying about health, personal injury, lost baggage, delays, etc.
Useful Reference:
Manulife
Link: https://www.manulife. com.hk/en/individual/products/ others/general-insurance/travelinsurance-and-others.html Tel: (852) 2510 3941
Citibank
Link: https://www.citibank.com. hk/english/insurance/travelinsurance/index.htm Tel: (852) 2860 0111
AIG
Tel: (852) 3666 7022 / 3555 0000 Link: ttps://www.aig.com.hk/ personal/travel-insurance?
Blue Cross
Link: https://www.bluecross. com.hk/en/Annual-TravelInsurance/Information Tel: (852) 3608 2988
If you have time, you can compare the travel insurance plan at various websites such as Moneysmart here: Link: https://www.moneysmart. hk/en/travel-insurance/ insurance-plans?
