A Guide To Purchasing Life Insurance In Hong Kong

You want to provide maximum security for your family. Unfortunately, unpleasant surprises and misfortunes in life can happen sometimes. Fret not; Little Steps has created this handy guide in explaining the basics of  Top Life Insurance and the top providers in Hong Kong to provide the best protection for your family.

WHAT IS LIFE INSURANCE AND WHY DO I NEED IT IN HONG KONG?

Life insurance essentially provides a safety net for your family. Although it might be daunting to look into life insurance, it doesn’t need to be. So let’s get into the basics of what life insurance is?

• Life insurance is a contract between you and your insurance company.
• The clients pay the insurance company premium payments, and in exchange, they will pay a death benefit to whomever you choose to be your beneficiaries after your death.
• This lump sum can be used for anything the beneficiary chooses, e.g., funeral costs, mortgage payments, university bills, etc.

MAIN TYPES OF LIFE INSURANCE – TERM AND PERMANENT:

There are two primary types of life insurance: term and permanent life.

Term life insurance offers protection for only a specific period, and the premium payments stay the same amount for the policy duration. Policy lengths can vary from 10 to 30 years.

Permanent life insurance offers lifelong coverage and therefore is more expensive. Within permanent life insurance, there are various options:

• Burial insurance – only covers funeral costs.
• Survivorship life insurance – insures two people under one policy.
• Universal life insurance – offers flexibility, e.g., you can change premium payments, and the cash value will build depending on the policy type.
• Whole life insurance – provides a fixed death benefit.

MORE KEY PERSONAL FINANCE ARTICLES FOR PARENTS IN HONG KONG:

• Top Savings Accounts For Kids And Teens
• Best Financial Planners
• Life Insurance Providers
• Making A Will And Guardianship
• Top Maternity Insurance Providers