Author
Bowtie Team
Updated on
2025-07-09
Disclaimer: This article is translated with the assistance of AI.
Some critical illness insurance plans offer death benefits, requiring you to name a beneficiary. If the life coverage feels insufficient, how can you boost it? The Bowtie team breaks it down and shares cost-effective ways to enhance your protection.
Understanding Critical Illness Insurance Coverage
Critical Illness Insurance primarily serves to provide a lump-sum payout to the insured upon diagnosis of specified severe illnesses (such as heart disease, stroke, or cancer) listed in the policy. This compensation helps cover living expenses during periods of inability to work due to illness. The payout is unrestricted in use, whether for medical bills, mortgage payments, or other daily needs.
What Is a Beneficiary in Insurance?
When we talk about a “beneficiary,” it usually refers to the person designated in a Term Life Insurance policy to receive the death benefit payout after the insured passes away. Note that a beneficiary can be an individual, a company, a charity, or even an estate. You can also name multiple beneficiaries, with the payout distributed according to the percentages specified by the policyholder.
Does Critical Illness Insurance Have Beneficiaries?
Since beneficiaries are often associated with life insurance, does critical illness insurance also involve beneficiaries? In other words, does it offer life insurance coverage as well?
Not every standalone critical illness (term CI) product includes a death benefit. However, Bowtie Term CI offers a compassionate death benefit to policyholders, equivalent to 5% of the insured amount. For instance, if the insured amount for critical illness is HK$2,000,000 and the insured unfortunately passes away, the beneficiary of the policy would receive a payout of HK$100,000.
Bowtie Offers 10 Beneficiary Relationship Options
In the event of the insured’s passing, the compassionate death benefit will be paid to the beneficiary. You can name more than one beneficiary, with the payout distributed based on the specified proportions. Bowtie provides 10 relationship options for beneficiaries, including:
- Spouse
- Siblings
- Children
- Parents
- Grandparents
- Grandchildren
- Nieces/Nephews
- Parents’ Siblings
- Cousins
- Fiancé/Fiancée
How to Enhance Life Insurance Coverage?
The death compensation mentioned earlier is of a compassionate nature. Even if some savings-type critical illness plans offer compensation equivalent to 100% of the critical illness coverage, the amount may not be sufficient to bridge the protection gap. This includes needs like repaying a mortgage, providing long-term living expenses for your family, or covering your children’s education costs.
After all, the principles for determining critical illness and life insurance coverage differ. The former is generally recommended to be 2 to 3 times your annual income to support living expenses during illness-related work stoppages. The latter depends on personal income and family financial conditions, potentially ranging from HK$6 million, HK$7 million, or even exceeding HK$10 million.
If you already hold a critical illness policy but feel the life insurance coverage it provides is insufficient, you should consider purchasing additional life insurance to boost your protection. If you prefer life insurance without savings or investment components and with high cost-effectiveness, why not take a look at Bowtie Term Life ? This product offers a lump-sum compensation to beneficiaries upon the insured’s passing, with key features including:
- Pure protection, with no savings component
- Under the same premium, coverage is up to 40 times higher than typical savings life products*
- Monthly premiums as low as HK$38 per HK$1 million of coverage
* Based on standard premiums for a 35-year-old non-smoking female with HK$1 million coverage; Term Life Insurance: Data reflects standard premiums for term life policies (20-year coverage period) in the market as of July 1, 2020.
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