[Low premium, high cover] Choose three major non-savings insurance plans; mix policies to broaden cover.

Risk management is an important issue for everyone. Even if unfortunate events such as accidents, illness or death happen to oneself, one would still hope to minimise the impact on oneself and one’s family. Some people choose to buy insurance to enhance their protection, thereby transferring risk to the insurance company.

For policyholders with a limited budget, they can choose zero-savings-term life insurance, term critical illness insurance or voluntary health insurance, so that every penny goes towards protection, and the required premiums are relatively affordable. We have also found that an annual premium of HK$4,000 is already enough for policyholders to purchase different products, strengthen their coverage and achieve “the price of bean dregs, the taste of roast goose”. 

Non-savings insurance is a pure protection plan and does not include any savings, investment or return element, resulting in lower premium pressure for policyholders. What term insurance products are available on the market to address different risks?  

• Term life: Provides life cover. If the insured sadly passes away, the beneficiary will receive a lump-sum payout.
• Term critical illness: Provides critical illness cover. If the insured is diagnosed with a specified critical illness, the beneficiary will receive a lump-sum payout.
• Voluntary Health Insurance: General products offer different deductible options (commonly known as the “excess”). Subject to the policy terms, the insured will receive reimbursement-based medical cover.  

The table below lists the premiums for a 35-year-old non-smoking man. Please note that the premiums for term insurance are generally adjusted upwards as the policyholder gets older and the risk increases.  

According to Table 1, term life insurance premiums are relatively inexpensive. Fubon Life’s product (with HK$1 million of cover) has a first-year premium of HK$145, or an average monthly premium of HK$12. Other term life products generally have first-year premiums in the hundreds of dollars, with an average monthly premium of less than HK$100.

As for term critical illness insurance, the price range of products is relatively wide. Bowtie’s product (with HK$1 million of cover) has a first-year premium of HK$756, whereas Bupa’s first-year premium is HK$5,024, a difference of more than four times.

For Voluntary Health Insurance, there is also a considerable premium gap between products. Policyholders can also significantly reduce premiums by selecting a deductible plan. For example, setting the deductible for Voluntary Health Insurance at between HK$40,000 and HK$50,000 results in a first-year premium ranging from HK$1,545 to HK$4,039.

Of course, the policy terms of different insurance products also vary, so one should not decide whether to take out a policy solely on the basis of premium levels. Coverage is equally important and should not be overlooked. That is why Table 1 includes the 10Life scores for a range of protection-only insurance products.  

Assuming an annual budget of HK$4,000, policyholders have many options, and may even mix and match different products to broaden their protection. As shown in Table 2, the combinations are divided into “term life + term critical illness”, “term critical illness + Voluntary Health Insurance” and “term life + Voluntary Health Insurance”, with “best value choice” and “top-rated choice” identified for each combination.

For example, in the “term life + term critical illness” combination, the premium for the “best value choice” is HK$901, while the “top-rated choice” has a premium of HK$1,172. If a policyholder wishes to enhance their life and critical illness protection through insurance, this combination may be more attractive. When choosing products, people may wish to consider which types of cover are most important, and then, according to their budget, put together different combinations to strengthen their protection.

Depending on each person’s circumstances and requirements, the sum insured and deductible for insurance policies may vary. For more details, please visit 10Life’s “Insurance Decoder”.

Compare term life insurance
Compare term critical illness insurance
Compare Voluntary Health Insurance

Note:
1. All the above products assume a 35-year-old non-smoking male policyholder, with a sum insured of $1 million for term life and term critical illness, and a deductible of $40,000 to $50,000 for Voluntary Health Insurance.
2. Last updated on: 22 October 2024

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.