Is Guaranteed Renewal a Beautiful Misunderstanding? The Term "Automatic Renewal" in Mainland Medical Insurance is Regulated. Will Hong Kong Follow Suit? (July Update)

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Recently, new policies have been introduced in Mainland China to regulate the use of terms such as "automatic renewal" and "guaranteed renewal" in short-term health insurance products, resulting in many such products being withdrawn from the market. Regarding renewal, many insurance products in both Mainland China and Hong Kong use similar terminology, leading customers to believe they are securing long-term coverage. In reality, do phrases like "automatic renewal", "guaranteed renewal", or the commonly used "guaranteed renewability" in Hong Kong medical insurance hide lesser-known pitfalls? For readers planning to purchase long-term medical insurance, how can they avoid sudden denial of coverage? Are there lessons from Mainland China's new policies that Hong Kong can learn from? Today, 10Life will explore these topics with you.

Short-Term Health Insurance in Mainland China Prohibited from Using Terms Like "Automatic Renewal"

Short-term health insurance in Mainland China typically offers coverage for one year or less. In the past, some insurance companies in Mainland China cleverly used terms like "automatic renewal" and "guaranteed renewal" as marketing tactics, misleading consumers into mistaking short-term health insurance for long-term products. However, at the time of renewal, policyholders might still be required to submit health reports again, or if the product's claim payouts exceed expectations, the insurance company could discontinue the product, leaving policyholders unable to renew.

To prevent misleading consumers, in mid-January this year, the China Banking and Insurance Regulatory Commission issued the "Notice on Issues Related to Regulating Short-Term Health Insurance Business" (hereinafter referred to as the "Notice", see Note 1). This requires insurance companies in Mainland China to refrain from using terms such as "automatic renewal" or "guaranteed renewal" in product terms and promotional materials for short-term health insurance, and even mandates the inclusion of "non-guaranteed renewal" clauses (see Note 2). Products that do not comply with the Notice must cease sales by 1 May 2021. Additionally, insurance companies are required to disclose the comprehensive claims ratio for short-term health insurance, allowing customers to assess whether the product is likely to remain on the market long-term.

"Guaranteed Renewability" Common in Hong Kong Medical Insurance – Can Consumers Rest Assured?

Medical insurance in Hong Kong generally provides coverage for one year and often promotes "guaranteed renewability", allowing policyholders to renew up to a specified age. During this period, policyholders must pay premiums on time, and even if claims have been made, no further underwriting is required.

However, "guaranteed renewability" may not apply to discontinued products. If an insurance company miscalculates risks or incurs losses due to medical insurance claims exceeding expectations, it retains the right to withdraw the product from the market and refuse renewal for policyholders. At that point, if the customer's health condition has changed or they have previously made claims, securing new coverage may not be straightforward, potentially resulting in exclusions or additional premium loadings. Moreover, "guaranteed renewability" does not necessarily mean the coverage remains unchanged. If the product is not profitable, the insurance company can still notify policyholders before the policy anniversary date to adjust, amend, or alter the policy's coverage, which may impact consumer rights.

Compared to standard medical insurance, Voluntary Health Insurance Schemes (VHIS) that offer "guaranteed renewability up to age 100" are evidently more regulated. Unless the insurance company is no longer authorised to underwrite under the Insurance Ordinance, terminates its registration with the government as a VHIS product provider, or the policyholder provides written notice of non-renewal (see Note 3), the policy will be automatically renewed. During renewal, the insurance company cannot arbitrarily reduce or downgrade the coverage or benefits of the VHIS (see previous articles for details). Compared to standard medical insurance, VHIS terms are more favourable to consumers (see Table 1 below).

Figure 1: Comparison of Renewal Terms for VHIS and Non-VHIS

Medical Insurance Plan	Details of Renewal Terms
Voluntary Health Insurance Scheme (VHIS)¹	(a) Unless the Company is no longer authorised to underwrite these terms and benefits under the Insurance Ordinance, or terminates its registration with the government as a VHIS product provider, or the policyholder, as described in Section 3 of Part 2, provides written notice to the Company not to renew these terms and benefits at least [insert a number of days not exceeding 30] _____ days prior, the renewal will proceed as follows: These terms and benefits will be automatically renewed in accordance with the latest version of the Standard Plan terms and benefits published by the government at the time of renewal (except for Section 7 of Part 1, Sections 1(b) and 5 of Part 6, and other exemptions approved by the government from time to time). Under the renewal scenarios described in paragraphs (a)-(c) above, any other amendments to the terms and benefits shall apply to all policies of the same category, and must not contradict paragraphs (a), (b), or (c) (as applicable) or result in a reduction of the applicable benefit limits, or an increase in co-insurance or deductibles compared to before renewal.
Non-Voluntary Health Insurance Scheme²	Subject to the terms and conditions stated in this policy, you are entitled to guaranteed renewability and may renew by prepaying the applicable annual premium at the then-current rate on each policy anniversary, provided that this plan remains available for renewal. We reserve the right to determine the terms and conditions of renewal.
Notes: 1. Excerpt from Section 1, Part 4 of the "Certified Product Policy Template for Voluntary Health Insurance Scheme (Revised July 2020)" published by the Food and Health Bureau. 2. Excerpt from the terms of a non-VHIS plan by an insurance company. 3. Bold and italicised text added by 10Life. 4. The above information is provided by 10Life, updated as of 9 June 2021, for reference only and does not constitute a sales proposal.

We have previously inquired with the Insurance Authority whether they would consider adopting measures similar to Mainland China's "Notice" to regulate the use of "guaranteed renewability" in medical insurance. The Insurance Authority responded that "guaranteed renewability" generally means that after the policy takes effect, the policyholder does not need to reapply each year, and regardless of any changes in their health condition, the insurance company will not conduct underwriting again.

Regarding how to ensure that the coverage of "guaranteed renewability" products is not reduced upon renewal, the Insurance Authority stated that, according to the "Guidelines on Medical Insurance Business" (Guideline 31), if an insurance company makes significant amendments to the features, terms, and conditions of a medical policy during renewal, the company must provide written notice to the policyholder well in advance of the renewal date or the effective date of the amendment.

Although Hong Kong medical insurance can still use terms like "guaranteed renewability", consumers should remain aware of the limitations, such as arrangements in the event of product discontinuation. In recent years, many Mainland Chinese residents have purchased medical insurance in Hong Kong, but the regulatory differences between the two regions should not be overlooked.

Notes:

Refer to the "Notice on Issues Related to Regulating Short-Term Health Insurance Business" for details.
The non-guaranteed renewal clause must at least include the following content: The insurance period of this product is one year (or less than one year). Upon expiry of the insurance period, the policyholder must reapply for coverage with the insurance company, and upon the insurer's agreement, pay the premium to obtain a new insurance contract.
For details, refer to Section 1, Part 4 of the "Certified Product Policy Template for Voluntary Health Insurance Scheme (Revised July 2020)" published by the Food and Health Bureau.
The above information is provided by 10Life, updated as of 23 July 2021, for reference only and does not constitute a sales proposal.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.

Last updated: 9 Apr 2026

10Life Editorial Team

Our team of professional content researchers focussing on insurance

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10Life Editorial Team

Our team of professional content researchers focussing on insurance

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Is Guaranteed Renewal a Beautiful Misunderstanding? Mainland Medical Insurance "Automatic Renewal" Terms Regulated. Will Hong Kong Follow? (Updated July 2021)

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