Can Mainland Chinese Buy Insurance in Hong Kong?

For nearly two decades, mainland visitors have been a significant source of clients for Hong Kong’s insurance industry. Following the border reopening between mainland China and Hong Kong, new business premiums contributed by mainland visitors in 2023 surged to HK$59 billion (accounting for nearly 33% of the total new long-term business premiums that year), a sharp rebound from the HK$0.7 billion to HK$6.8 billion range seen between 2020 and 2022.

In 2023, mainland visitors primarily purchased whole life insurance (i.e., savings-linked life insurance) (55%), critical illness (34%), and medical insurance (4%).

The Hong Kong Insurance Authority anticipates that due to the significant interest rate differential between mainland China and the US, the demand from mainland visitors to purchase insurance policies in Hong Kong will remain strong in 2024. New business premiums contributed by mainland visitors are projected to reach HK$40 billion in 2024.

Hong Kong insurance products have long been popular among mainland visitors, primarily because Hong Kong policies offer distinct advantages over mainland policies in terms of premiums, coverage, claims, renewal, exclusions, policy terms, and currency options.

Every year, many mainland friends visit Hong Kong to purchase insurance policies. What are the differences between mainland residents applying for insurance in Hong Kong and Hong Kong residents doing so? Is the process complicated? Below is a comprehensive summary of the detailed application process and required documents for mainland residents purchasing insurance in Hong Kong:

Understand Your Coverage Needs

Before mainland residents apply for insurance in Hong Kong, it’s crucial to first understand their own protection or financial needs. They should then carefully consider and select suitable insurance products based on information available online from insurance companies or product details provided by insurance intermediaries.

Life, critical illness, and medical insurance products offer vastly different coverages. If applying for life or critical illness insurance, one must also consider whether a savings-linked product is needed.

Choose Insurer & Policy

Once the product category is determined, applicants should carefully compare similar products offered by various insurance companies, as well as evaluate the insurers’ reputation and after-sales service, before selecting the underwriting insurance company and deciding on the policy to purchase.

Prepare Required Documents

Once the product is selected, mainland residents typically need to prepare the following documents to purchase a Hong Kong policy:

• Mainland China Resident ID Card or Passport
• Exit-Entry Permit for Travelling to and from Hong Kong and Macao
• Proof of Address
• Bank/Financial Institution Monthly Statement
• Birth Certificate
• Household Registration Booklet (Hukou)
• Medical Examination Report or Other Medical Records (depending on insurer’s requirements)

The documents required from mainland clients vary among different insurance companies. Please refer to the latest announcements from the respective insurance companies for details.

Online or Intermediary Application

After mainland residents have chosen their product and insurance company, they can, depending on the insurer’s regulations, apply online or meet with an insurance intermediary in Hong Kong to apply. When applying, applicants generally need to provide basic personal information and declare their health status. Applicants should truthfully answer the insurance company’s health questionnaire and proactively provide supplementary information if necessary.

Policy Terms & Conditions

Before officially signing the policy, one should carefully read the policy terms, such as coverage scope, exclusions, and premium payment details. If any clauses are unclear or raise doubts, immediately inquire with the insurance company or intermediary.

Premium Payment Methods

After submitting the insurance application and successfully passing underwriting, the applicant must pay the premium. Currently, over 90% of mainland clients purchasing policies in Hong Kong pay premiums via non-lump-sum (non-one-off) methods. Premium payment can be made annually or monthly, and applicants can pay through cash, cheque, credit card, or bank wire transfer, among other methods.

Every year, many Mainland visitors come to Hong Kong to purchase insurance. However, due to differences in insurance products, relevant regulations, and cultural aspects between the Mainland and Hong Kong, regulatory bodies from both regions have issued some important points for Mainland residents intending to purchase insurance in Hong Kong:

Key Advice from China’s Insurance Regulator

• Mainland residents must personally sign policies in Hong Kong; otherwise, it is illegal. Hong Kong policies are not protected by Mainland law but are subject to Hong Kong law.
• Mainland residents purchasing insurance in Hong Kong can choose to settle policies in HKD or foreign currencies, and must bear their own foreign exchange risks. Policyholders should also be aware of foreign exchange policy risks related to investment dividends and installment premium payments for Hong Kong life insurance policies.
• Hong Kong’s insurance market is highly market-oriented. Most participating products demonstrate annual returns of over 6%, but policyholders must note that projected returns consist of both guaranteed and non-guaranteed components, with the latter having significant uncertainty in performance.
• Hong Kong regulators have no specific requirements for policy cash values. Policyholders should be aware that early surrender of a policy may result in significant losses due to lower initial cash values.
• Hong Kong policy terms use Traditional Chinese characters, and their expression differs from those in the Mainland. Policyholders must carefully read the insurance terms to fully understand insurance liabilities and claim conditions, etc., to avoid future contractual disputes.

Key Advice from Hong Kong’s Insurance Authority

• Policyholders should pay premiums directly to the underwriting insurance company, not to individual insurance agents.
• Policyholders should be suspicious if solicited for insurance by Hong Kong insurance agents in Mainland China. Due to differing regulations between the two regions, licensed Hong Kong insurance agents do not engage in cross-border business solicitation.
• Policyholders should not purchase insurance from unlicensed individuals or follow their advice. If in doubt, you can inquire through the Hong Kong Insurance Authority’s website , or contact the insurance company directly.