Author
Bowtie Team
Updated on
2025-05-28
Disclaimer: This article is translated with the assistance of AI.
As we age, financial obligations tend to increase. From supporting our parents to covering education, housing, vehicles, and mandatory contributions, the costs can add up quickly. Is committing to insurance premiums for over a decade worthwhile for lifelong protection? Explore the differences, potential consequences of halting payments, and much more!
What Are the Investment Features of Savings Insurance?
Some insurances have investment or savings components, which can be shortened to Savings insurance .
Most savings insurance products are a conservative financial tool 1 , where policyholders regularly or in a lump sum provide funds to the insurance company for investment. Upon policy maturity, they can withdraw the cash value, which includes the principal, guaranteed and non-guaranteed returns .
Since these products typically have a lock-in period, policyholders cannot voluntarily terminate the policy during this time. If premiums are missed or payments stopped midway, it could result in losses, preventing the achievement of the projected returns outlined in the plan, similar to financing a property purchase.
- 1 Some high-risk savings insurance products, such as Investment-linked life insurance plans , do not offer ‘guaranteed returns’ (except for death benefits), so policyholders must bear all investment risks.
How Long Does It Take to Fully Pay for Savings Critical Illness Insurance?
One of the most common savings insurance products is critical illness insurance, with payment periods ranging from as short as 5 years to as long as 20 years or more, depending on whether you choose a short-term, medium-term, or long-term plan.
Since savings-type insurance covers both asset growth and medical protection, the premiums are higher than pure protection products of the same type, often exceeding several thousand dollars per month .
Regarding returns, during the policy term, policyholders can claim eligible medical expenses. Upon maturity, they may receive the principal and interest based on the circumstances. Since interest includes both guaranteed and non-guaranteed returns, for a more accurate calculation of total returns, it is recommended to refer to the insurance company’s internal rate of return (IRR) and historical dividend realization rate.
| Plan | Premium | Critical Illness Coverage | Guaranteed Cash Return | Can Stop Payments | Can Be Purchased Online |
| Bowtie | $17,280 (10 years)* | ✓ | ✘ | ✓ 2 | ✓ |
| Company A | $459,600 (10 years)* | ✘
( HK$1 million ) |
✓ | Surrender after the 3rd policy anniversary to receive guaranteed cash value | ✘ |
| Company B | $7,862,178 (18 years)^ | ✘ ( US$100,000 ) | ✓ | Surrender value will be used to repay loan balance, with only the remaining amount returned | ✘ |
- * For example, for a 35-year-old non-smoking male with a coverage of $1,000,000 HKD
- ^ For example, for a 35-year-old non-smoking male with a coverage of $100,000 USD (approximately $776,760 HKD)
- 2 If you wish to reinstate the policy after discontinuation, the insured needs to undergo re-underwriting
What Are The Consequences of Stopping Insurance Premium Payments?
Discontinuing payments does not mean canceling the policy; if you decide not to pay premiums on time, the insurance company will not immediately terminate your policy.
The insurance company will typically first check the balance in your policy account. If funds are insufficient, they will use dividends to cover the premiums. If dividends are not enough, they may use a policy loan to pay, which incurs interest and depletes the policy’s cash value, wasting money that could otherwise be withdrawn.
If you want to learn more about the impact of discontinuing payments on policyholders, you can click here .
Should I Choose Savings Insurance or Pure Protection Plans?
Savings-type and pure protection insurance plans each have their pros and cons, suitable for different types of individuals. You can use the following questions to determine which plan is more appropriate for you:
- Are you aiming for savings or investment?
- Is your income stable?
- Do you have no understanding of or interest in learning about investments?
- Is your risk tolerance low?
- If you need to pay fixed premiums regularly, do you still have sufficient liquid funds?
If your answers are mostly “no” , then savings-type insurance may not be your first choice.
Bowtie simplifies product designs to significantly improve the value for money of each insurance plan, including Touch Wood Protector , VHIS , Cancer Fighter , Term Life and Term Critical Illness , allowing policyholders to get the maximum coverage at the lowest cost! Click here to learn more about Bowtie’s pure protection products .
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