Author
Bowtie Team
Updated on
2025-06-03
Disclaimer: This article is translated with the assistance of AI.
Buying insurance—especially medical coverage—might seem easy when paying premiums, but how do you pick the right plan? When’s the best time to buy? Many policyholders, even seasoned ones, fall into these 5 costly mistakes. Read for tips to avoid wasting money on unnecessary premiums and being denied coverage when you need it most!
Is Insurance a Scam?
First, insurance itself is not a ‘scam’. As long as you avoid the following traps, most insurance companies will compensate according to the policy terms, as no company would like to see their reputation destroyed.
1. Avoid Buying Insurance Only When You’re Ill
Some people think that buying a reimbursement medical insurance while healthy is a bad deal, so they plan to wait until they get older and their health deteriorates .
However, since insurance companies need to balance risks and maintain the interests of all policyholders, they are much less likely to accept applications from people with pre-existing conditions, as it will add unreasonable financial burden to healthy policyholders.
Therefore, the best time to buy medical insurance is the earlier, the better . None of us could predict when we’ll get sick or injured, so applying while healthy is a wise decision!
Buying insurance when you’re already ill might mean the insurance company won’t cover that risk, and you could end up being unable to buy any insurance at all !
Moreover, even if you manage to buy it while unhealthy, the insurance company might add Loading , which means ‘extra premiums’, or exclusions . For example, if you previously had a serious stomach condition, even if your application is approved, future claims related to your stomach like surgery costs might be denied.
2. Avoid Buying Without Comparing
Some people hear a sales pitch from an insurance intermediary or see an attractive ad from an insurance company and rush to buy, but this isn’t the ideal approach.
While intermediaries and insurance companies aren’t deceiving you, they might not provide a neutral comparison of similar products in the market, so it’s recommended to visit neutral websites and do your own research. For instance, the Voluntary Health Insurance Scheme (VHIS) has an advantage: the government publicly discloses the coverage and premiums of all plans in Hong Kong, and they’ve created a tool to help you compare, which is regularly updated with policy changes.
Taking the VHIS ‘Standard Plan’ as an example, while the coverage from different companies is largely the same, monthly premiums can vary by about $250* . You might think a few hundred dollars a month isn’t a big issue, but what about over 5 years, 10 years, or even 20 years ?
Spending a little time comparing can save you thousands of dollars in premiums, enough for several trips to Japan.
3. Avoid Choosing Certain Insurance Just To Follow Suit
Insurance terms can sometimes be complex, but if you hear that relatives or friends have bought a certain savings insurance or high-end medical plan and decide to follow suit for convenience, you might fall into another purchasing trap.
You should consider whether your health and financial situation are suitable for the particular type of insurance, and consider if you actually need that coverage amount. Buying just because others are could mean you’re paying unnecessary premiums, and you might end up with mismatched coverage , exposing you to risks of not getting covered for some conditions!
4. Avoid Concealing Medical History When Buying Medical Insurance
Usually, buying insurance requires Underwriting . Insurance companies ask about your health issues, and you should always answer honestly.
Every time you seek medical help, have a physical examination, or visit a government emergency room, hospitals or clinics already have records, and Insurance Company can easily check your medical history.
Not declaring your medical history might help you to pass underwriting more easily, but when you need to claim money, the insurance company has the right not to pay you a single penny . Not disclosing your medical history will lead to your own loss!
5. Try To Understand Your Policy And How To Claim
Whether you buy insurance online or through an intermediary, we recommend that you read through the details of your policy. You never know if the intermediary will leave or change, so do make sure that you understand your policy well enough to make a claim by yourself!
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