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34% off term life insurance premiums for 3 years
Hong Kong ranks first globally in life insurance density and penetration. However, Hong Kong people tend to favour products with savings or investment components, while pure insurance term life policies accounted for only 0.9% of the market in 2019 (see Note 1). Nevertheless, an increasing number of insurance companies have entered the Hong Kong market in recent years. Together with the rise of digital channels, this has led to a price war in term life insurance premiums, with premiums falling by 34% over three years.
Term life insurance premiums are generally cheaper, resulting in higher compensation multiples (leverage) than whole life insurance. If the insured dies during the coverage period, the beneficiary may receive a lump-sum death benefit in accordance with the policy terms. Term life insurance premiums are determined based on the insured’s age, premium payment period and sum assured. Both the maximum age of coverage and renewal period are subject to limits.
Chart 1: Term life insurance premiums have fallen sharply in recent years
| Insured | 2019 | 2021 | Three-year reduction | ||||
| Cheapest term life insurance | Average premium over 10 years (HKD) | Cheapest term life insurance | Average premium over 10 years (HKD) | ||||
| Age 35 Non-smoking male | HSBC Easy Protect (10-year renewal) | $1,031 | FWD MyTerm Term Protection Plan (10-year renewal) | $680 | 34% | ||
| Age 35 Non-smoking female | HSBC Easy Protect (10-year renewal) | $811 | FWD MyTerm Term Protection Plan (10-year renewal) | $592 | 27% | ||
| Notes: 1. All term life insurance products are based on the same assumptions: a 35-year-old non-smoking male and female, a first-year death benefit of HKD1 million and a 10-year coverage period; 2. The estimated annual premium is the average annual premium for the relevant product over 10 years; 3. The FWD MyTerm premium includes a 50% discount on the first-year premium and a 30% discount on premiums during subsequent renewal periods; subject to the insurer’s terms and conditions; 4. The above information is provided by 10Life for reference only and does not constitute sales advice. Information updated as at 7 September 2021; 5. Insurance companies reserve the right to amend offers without prior notice. Readers should check the offer details (if applicable) with the insurance company before taking out a policy. | |||||||
Using a 35-year-old non-smoking male with a sum assured of HKD1 million as an example, the 10-year average premium for HSBC Life Easy Protect (renewable every 10 years) was HKD1,031 in 2019, making it the cheapest in the market. By 2021, FWD MyTerm (renewable every 10 years) had introduced a discount recently, bringing its 10-year average premium down to HKD680 and overtaking HSBC to become the cheapest in the market.
Over three years, the 10-year average premium fell from HKD1,031 to HKD680, a reduction of up to 34%. At HKD680, the daily premium is equivalent to HKD1.7, which is cheaper than a one-way fare on any form of public transport.
Taking a 35-year-old non-smoking female as another example, the 10-year average premium for HSBC Life Easy Protect (renewable every 10 years) was HKD811 in 2019. However, in 2021, FWD MyTerm remained the cheapest option, with a 10-year average premium of HKD592, representing a 27% reduction over three years.
10Life analyses the reasons for the price reductions as follows:
- In recent years, the Insurance Authority has issued virtual insurance licences, and a number of companies, including Bowtie and ZA, have entered the market with cheaper term life insurance products. As competition has emerged, more insurance companies have reduced their prices to compete;
- In the past, insurance companies relied on insurance advisers to arrange policies for customers. Since the internet became widespread, relatively straightforward term life insurance products can be sold directly online. This has substantially reduced intermediary costs, creating scope for term life insurance premiums to fall.
It is worth noting that most insurance companies have reduced their term life insurance premiums over the past three years (see Charts 2 and 3). In addition to insurers focusing on online channels, BOC Life also made a significant reduction of more than 40% this year, with the 10-year average premium for a 35-year-old male falling to HKD980 per year. HSBC Life also reduced its premium slightly by 3.4% to HKD996. AIA’s term life insurance was unusual in that it became more expensive in 2021, with premiums rising by nearly 10% from 2020 to HKD1,436.
Chart 2: Term life insurance premiums offered by insurance companies (estimated annual premium averaged over 10 years and annual rate of change for a 35-year-old non-smoking male)
| Insurance company | 2019 | 2020 | 2021 |
| AIA | $1,300 | $1,300 | $1,436 |
| 0.0% | 10.5% | ||
| Blue | $1,070 | $882 | $8825 |
| -17.6% | 0.0% | ||
| BOC Life | $1,828 | $1,828 | $980 |
| 0.0% | -46.4% | ||
| Bowtie | $852 | $837 | |
| -1.8% | |||
| China Taiping | $1,030 | $1,030 | $1,030 |
| 0.0% | 0.0% | ||
| FWD | $2,170 | $2,170 | $680 3 |
| 0.0% | -68.7% | ||
| HSBC Life | $1,031 | $1,031 | $996 6 |
| 0.0% | -3.4% | ||
| Prudential | $1,450 | $1,450 | $1,450 |
| 0.0% | 0.0% | ||
| ZA Insure | $870 | $853 4 | |
| -2.0% |
Chart 3: Term life insurance premiums offered by insurance companies (estimated annual premium averaged over 10 years and annual rate of change for a 35-year-old non-smoking female)
| Insurance company | 2019 | 2020 | 2021 |
| AIA | $1,110 | $1,110 | $1,235 |
| 0.0% | 11.3% | ||
| Blue | $840 | $649 | $6495 |
| -22.7% | 0.0% | ||
| BOC Life | $1,421 | $1,421 | $794 |
| 0.0% | -44.1% | ||
| Bowtie | $612 | $600 | |
| -2.0% | |||
| China Taiping | $760 | $760 | $730 |
| 0.0% | -3.9% | ||
| FWD | $1.860 | $1,860 | $592 3 |
| 0.0% | -68.2% | ||
| HSBC Life | $811 | $811 | $784 6 |
| 0.0% | -3.3% | ||
| Prudential | $1,290 | $1,290 | $1,290 |
| 0.0% | 0.0% | ||
| ZA Insure | $640 | $627 4 | |
| -2.0% |
Notes:
1. All term life insurance products are based on the same assumptions: a 35-year-old non-smoking male and female, a first-year death benefit of HKD1 million and a 10-year coverage period;
2. The estimated annual premium is the average annual premium for the relevant product over 10 years;
3. This annual premium includes a 50% discount on the first-year premium for FWD MyTerm and a 30% discount on premiums during subsequent renewal periods. The offer code “MYT50TL” must be entered on the FWD website. Subject to the insurer’s terms and conditions;
4. This annual premium includes a 20% discount on the first-year premium for ZA Insure. The offer code “Life20” must be entered on the ZA website. Subject to the insurer’s terms and conditions;
5. This annual premium includes a 20% discount on the first-year premium for Blue WeCare Term Life Protection Plan 2. The offer code “FT220” must be entered on the Blue website. Subject to the insurer’s terms and conditions;
6. This annual premium includes a discount equivalent to the first four months’ premiums for HSBC LifeHSBC Family Protector. The offer code “4MTHFR” must be entered on the HSBC Life website. Subject to the insurer’s terms and conditions;
7. The above information is provided by 10Life for reference only and does not constitute sales advice. Information updated as at 7 September 2021;
8. Insurance companies reserve the right to amend offers without prior notice. Readers should check the offer details (if applicable) with the insurance company before taking out a policy.
Average protection gap of HKD1.9 million for working people
The Insurance Authority’s “Study on the Protection Gap for Mortality Risk” published last month showed (see Note 1) that Hong Kong’s overall mortality risk protection gap is expected to reach HKD6.9 trillion, with an average protection gap of approximately HKD1.9 million per working person. The study indicated that this gap could be filled through the use of existing, straightforward and reasonably priced insurance products, with term life insurance playing an important role in this regard.
According to the Insurance Authority’s definition, term life insurance provides protection when ordinary families face unexpected changes in their lives—particularly when the premature death of a family member threatens their ability to maintain a decent standard of living. In fact, countries around the world are facing the challenges of ageing populations and rising healthcare costs. Closing the mortality risk protection gap can help alleviate the problems caused by the premature death of a family breadwinner, while also helping to reduce the rapidly rising public burden.
10Life’s Insurance Decoder also compares a number of term life insurance products available in the market. For details, please visit:
- Term life insurance (annual renewal)
- Term life insurance (renewal every 5 years)
- Term life insurance (renewal every 10 years)
- Term life insurance (renewal every 20 years)
Note:
- Results of the Insurance Authority’s first “Study on the Protection Gap for Mortality Risk”
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.
10Life Editorial Team
Our team of professional content researchers focussing on insurance
10Life Editorial Team
Our team of professional content researchers focussing on insurance
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10Life Product Comparison and 10Life Insurance Ratings are developed by 10Life Financial Limited, an authorised insurance broker company licensed with the Insurance Authority under License Number FB1526. 10Life Product Comparison and 10Life Insurance Ratings are developed for generic customer segments using mathematical calculations based on product information, facts and data, and are not influenced by any partnerships with or fees received from insurance companies. Any information on 10Life Platform ("10Life Information"), including but not limited to Product Comparison, Product Ratings, Blog Articles are intended for general education purpose and reference only. None of the 10Life Information is intended, nor should they be considered or relied upon, as regulated advice, insurance, financial, investment or professional advice, recommendation, approval, endorsement, invitation or solicitation in respect of any insurance, financial or investment products. 10Life Information does not take into account your individual needs. Reading 10Life Information should not be considered as conducting a suitability assessment, and is not sufficient to form the basis of any decisions to purchase any insurance products. You should rely on information authorised by insurance companies, carry out your own research and/or seek independent advice from licensed intermediaries before purchasing any insurance products or making any insurance decisions. While reasonable effort is used when collecting, validating and updating 10Life Information from various channels, none of 10Life Group and its subsidiaries, affiliates, agents, directors, officers and employees will be responsible for any liability, claim or loss arising from or associated with you using 10Life Information. No warranty, representation or guarantee is given by 10Life Group and its subsidiaries on the accuracy, completeness and timeliness of the information. If you have any questions on 10Life Product Comparison and 10Life Insurance Ratings, please email us at enquiries@10life.com
