Insurance

Family Medical Insurance: 6 Major Comparison Factors + Insurance Recommendations

Different stages of life require different insurance needs. So, what are the differences in medical insurance needs for the elderly who have retired, working adults in their prime, and children who are still in school? Bowtie has invited a financial expert to explain to everyone, as well as share the six major factors to consider before purchasing medical insurance and recommendations for getting insured.

Author 劉智偉

Reviewed by John Sze

Date 2023-11-28

Updated on 2023-11-29

What Insurance Does a Family Need?Six Major Comparison Factors When Purchasing Medical Insurance for Family Family Medical Insurance Suggestions

What Insurance Does a Family Need?

What insurance do seniors need?

For individuals over sixty, who may already have elder roles such as grandparents, medical insurance is the most crucial among various insurance types. If the elderly have already retired, in most cases, they have lost the company’s medical insurance and can only rely on their own medical insurance to handle medical expenses. Without medical insurance, they would have to depend solely on savings, which could adversely affect their retirement financial planning.

If the budget is tight, it is advisable to consider starting with entry-level medical plans, such as Voluntary Health Insurance Scheme (VHIS) standard plan, to obtain basic medical protection. Although such a plan may not cover all medical costs (such as cancer), it still provides the elderly with an additional option to determine the appropriate treatment plan.

If the budget allows, it is recommended to consider higher-coverage insurance or high-end medical insurance with full coverage to strengthen the safety net.

What insurance do adults need?

For working adults, all types of insurance serve the purpose of maintaining family financial health and risk management, with medical insurance still being the most important aspect. Considering that working professionals might have support from company group medical insurance, they can choose appropriate medical insurance plans according to their needs to supplement the limitations of company medical coverage. High-end medical insurance plans with deductibles are an option to consider.

Furthermore, working adults should also consider critical illness insurance and life insurance. These can respectively hedge against the economic loss caused by unfortunate cases of critical illness or death.

What insurance do children need?

If the budget allows, parents should choose semi-private room level medical insurance for their children. Many private hospitals require children with illnesses (especially infectious diseases) to stay in single rooms or at least low-density wards like semi-private rooms to prevent cross-infection.

Moreover, it is common for children to get injured while playing or participating in sports, so accident insurance is also of great importance. It can effectively cover outpatient or hospitalization medical expenses, which can amount to thousands or even tens of thousands of dollars.

Six Major Comparison Factors When Purchasing Medical Insurance for Family

Coverage

High-end medical insurance plans that do not set item limits and provide full coverage can offer the most appropriate medical support in unfortunate cases of serious illness. If high-end medical insurance exceeds the budget, when selecting other medical insurance products, particular attention should be given to whether the coverage amount for each individual item is sufficient, or if there is additional medical coverage (such as SMM) to cover all or part of the “excess” after exceeding the limit.

Required Level of Medical Services

Overall, the service level of private hospitals in Hong Kong is very high, but the charges can vary significantly. The fees at some hospitals may be much higher than others. Consumers should take note of whether the level of insurance coverage, such as the ward level and compensation amount, is sufficient to cover the common surgical costs at their preferred medical institutions.

As mentioned earlier, in certain situations, many private hospitals may require children to stay in wards with lower patient density. In such cases, ward room level medical insurance may not fully compensate for the final medical expenses, and parents are likely to have to pay the “excess” portion themselves.

Is There a Deductible?

If your company’s medical insurance coverage is insufficient, you can enhance your protection with medical insurance that includes a deductible. Generally, for two products offering the same coverage, the insurance premium with a deductible will be cheaper, allowing you to economically obtain additional protection.

Premium

Medical insurance premiums typically increase with age, and insurance companies adjust premiums in response to medical inflation and other factors. Since medical insurance is not a one or two-year expense but rather an expense that spans several decades, it is recommended to compare prices before purchasing a policy. Making a wise choice in selecting a plan may save you and your family tens of thousands or even hundreds of thousands of dollars in premium expenses over the next few decades.

Can Premiums Be Tax Deductible?

It’s important to note that not all medical insurance premiums are eligible for tax deductions. Only VHIS can qualify for tax deductions on the relevant premiums for that particular year, with a maximum deduction limit of $8,000 per insured person.

To understand the potential tax savings when a family simultaneously obtains voluntary medical insurance, you can refer to the following example of family tax deductions. Mr. Wong insured a family of four and was able to save $2,067 in taxes:

	Mr. Wong 👨🏼‍🦲	Mrs. Wong 👩🏽	Son 👦🏽	Daughter 👧🏽
Annual Actual Premium Paid	$3,372^	$4,476#	$1,920*	$2,196@
Premium Eligible for Tax Deduction	$3,372^	$4,476#	$1,920*	$2,196@
Tax Deduction Amount (Assuming a tax rate of 17%*)	$3,372 x 17% = $607	$4,476 x 17% = $761	$1,920 x 17% = $326	$2,196 x 17% = $373
Final Annual Expense (Actual Premium Paid – Tax Deduction Amount)	$3,372 – $607 = $2,765	$4,476 – $761 = $3,715	$1,920 – $326 = $1,594	$2,196 – $373 = $1,823

^{^The standard premium for a 40-year-old, non-smoking male insured with the Bowtie VHIS Flexi Regular is used for calculation}
^{#The standard premium for a 40-year-old, non-smoking female insured with the Bowtie VHIS Flexi Regular is used for calculation}
^{*The standard premium for a 20-year-old, non-smoking male insured with the Bowtie VHIS Flexi Regular is used for calculation.}
^{@The standard premium for a 20-year-old, non-smoking female insured with the Bowtie VHIS Flexi Regular is used for calculation.}

Virtual Insurers vs Traditional Insurers

In the past, when purchasing medical insurance, the primary method was to go through an intermediary to buy from traditional insurance companies. The advantage of this approach is that the intermediary can explain the product details and provide after-sales service. However, if the intermediary provides poor after-sales service or leaves the job, policyholders may face difficulties in handling their claims, especially if the policy becomes orphaned.

In recent times, virtual insurance companies have emerged, offering online insurance services. The entire process, from quoting and underwriting to policy management and claim filing, can be self-serviced using a computer or mobile phone. This allows interested individuals to collect and compare data on their own, eliminating the worry of being subjected to aggressive sales tactics. For consumers, this advanced insurance model may be a better choice.

Family Medical Insurance Suggestions

Insurance for Working Adults: Bowtie Pink

Offers full coverage¹ without sub-limits for eligible medical expenses such as diagnosis hospitalisation, surgery, etc
Provides the option for a ‘deductible’ to complement company medical insurance
Monthly premiums can be as low as $186²

Insurance for Children: Bowtie Pink

Offers full coverage¹ without sub-limits for eligible medical expenses such as diagnosis hospitalisation, surgery, etc
Provides coverage at the semi-private ward level
Monthly premiums can be as low as $540³

Insurance for Retired Seniors: Bowtie VHIS Flexi + Gleneagles Hospital Hong Kong Wellness Package combination

Full reimbursement^ for 240+ selected Medical Packages in various specialties⁴
Free comprehensive health examination and optional health services annually
Monthly premiums are affordable at $989⁵

1The Bowtie Pink Voluntary Health Insurance series fully covers eligible medical expenses such as diagnosis, hospitalisation, surgery, and prescribed non-surgical cancer treatments (except in the United States), and is subject to annual benefit limits and lifetime benefit limits. If the claim involves confinement in a Mainland China Hospital unlisted in / a High-end Mainland China Hospital listed in the "List of Designated Hospitals in Mainland China" / confinement in a room higher than the restricted ward class / a pre-existing condition, the relevant benefit payable may be adjusted. For details, please refer to Section 1(b), 1(c) of the Supplement No. 1 and Section 6.4 of the Terms and Conditions.
2For a 30-year-old non-smoker, the monthly premium for Bowtie Pink (Ward Room) with a deductible option of $80,000 is $186.
3For a 5-year-old non-smoker, the monthly premium for Bowtie Pink (Semi-private Room) with a deductible option of $0 is $540
4Full reimbursement of selected medical package costs is subject to the annual benefit limit of the VHIS Flexi Plan.
5For a 60-year-old non-smoking male, the total basic monthly premium for the Bowtie VHIS Flexi Regular with the addition of the "Bowtie & Gleneagles Hospital Hong Kong Wellness Package" is $989.