Author
Bowtie Team
Updated on
2025-06-19
Disclaimer: This article is translated with the assistance of AI.
Life insurance is a Hong Kong staple, often bought for family protection – but did you know some companies provide it for employees too? Dive in with the Bowtie team to uncover group life insurance and key person coverage essentials!
Group Life Insurance
The human resources market is fiercely competitive, Company medical insurance although not a legal requirement, it is already a benefit attached to most positions. Some companies, to attract and retain talent beyond medical insurance, also provide life insurance to employees, known as group life insurance.
The purpose of group life insurance is to provide a lump-sum compensation to the beneficiaries—typically the family of the insured employee—upon the employee’s death, offering financial support to help the family through this difficult time. For the company, group life insurance not only enhances employee benefits but also allows the premiums paid to be deducted from profits tax.
The coverage amount for group life insurance is generally determined by the employee’s job level, with higher positions typically receiving higher coverage. The amount can be a fixed sum (such as HK$500,000 or HK$2,000,000) or set as a multiple of the employee’s basic monthly salary (for example, 24 times or 36 times the monthly salary).
Beyond basic life coverage, some group life insurance plans on the market can include additional riders for disabilities and critical illnesses upon the company’s request, helping to further enhance employee protection.
Key Person Life Insurance
In addition to group life insurance, companies might also purchase another type of life insurance called key person life insurance. This is designed to protect the company from the impact if a core member—such as founders, CEOs, directors, or senior executives—suddenly passes away. Therefore, the company insures these key individuals, with the beneficiary set as the company itself. The coverage amount is determined by the company based on factors like the deceased’s impact on revenue, as well as costs for recruiting and training a successor.
Do You Need Additional Personal Life Insurance If Your Company Provides One?
If your company already provides group life insurance, do you still need to get your own life insurance? The answer is yes. That’s because group life insurance isn’t a legal requirement, and not every company offers it. If you change jobs, get laid off, or the company shuts down, your coverage will immediately lapse, leaving you in a protection gap.
Additionally, group life insurance provided by companies doesn’t involve individual underwriting and must balance premium costs, so the coverage amounts are generally limited—especially for front-line or mid-level employees. Referring to a brochure from a certain group life insurance product, front-line and mid-level employees might only get HK$300,000 to HK$500,000, or 12 to 24 times their basic monthly salary. This amount might not be enough to help families cope after losing their breadwinner. So, getting your own life insurance is the safer bet.
Why Bowtie Term Life Is The Best Top-Up Plan
Group life insurance often has limited coverage, which might not be enough to cover mortgage loans, provide long-term living expenses for your family, or fund your children’s education.
If you feel that your company’s life insurance isn’t sufficient (or isn’t offered at all) and you want to boost your protection, you should get your own life insurance as a top-up.
Bowtie Term Life is a pure protection term life product without any savings or investment components, offering high-value life coverage. This product provides a lump-sum payout to beneficiaries upon the insured’s death, with key features including:
- Pure protection, with no savings component
- Under the same premium, coverage is up to 40 times higher than typical savings-based life products*
- As low as HK$38 per month for every HK$1,000,000 in coverage
*Based on standard premiums for a 35-year-old non-smoking female with HK$1,000,000 coverage; Term life insurance: Data from July 1, 2020, for term life policies with a 20-year term
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