Author Bowtie Team
Updated on 2025-06-11
Disclaimer: This article is translated with the assistance of AI.
Explore Bowtie’s in-depth comparison of top HKD short-term savings insurance options, including minimum entry fees, contribution periods, and guaranteed returns for smart investing.
Hong Kong Dollar Short-Term Savings Insurance
Think of short-term savings insurance as a savvy way to preserve your capital while earning a guaranteed return. In the Hong Kong market, these plans typically feature policy terms of 3 or 5 years, with some options stretching just 1 year. Premium payment choices include upfront payment, 1-year, 2-year, or 3-year options, and the guaranteed internal rate of return (IRR) at maturity ranges from 1.76% to 4.29%.
Comparison of Hong Kong Dollar Short-Term Savings Insurance
5-Year Plan Comparison
| Product | W Company Plan 1 | H1 Company Plan 1 |
| Premium Payment Period | 1 year or upfront | 2 years |
| Guaranteed IRR at Maturity | 4.29% | 3.8% |
| Guaranteed Break-Even Period | 2 years | 4 years |
| Minimum Total Premium | HK$ 6,000 | HK$ 14,400 |
| Guaranteed Return Ratio at Maturity | 123.4% | 118.2% |
| Product | W Company Plan 2 | H2 Company Plan 1 | H2 Company Plan 2 |
| Premium Payment Period | 1 year or upfront | 1 year or upfront | 2 years |
| Guaranteed IRR at Maturity | 2.8% | 2.2% | 2.16% |
| Guaranteed Break-Even Period | 3 years | 5 years | 5 years |
| Minimum Total Premium | HK$ 6,000 | HK$ 40,000 | HK$ 40,000 |
| Guaranteed Return Ratio at Maturity | 114.8% | 111.5% | 110.1% |
3-Year Plan Comparison
| Product | W Company Plan 3 | C Company Plan 1 | Z Company Plan 1 |
| Premium Payment Period | 1 year or upfront | 2 years | 1 year or upfront |
| Guaranteed IRR at Maturity | 4.14% | 2.99% | 2.5% |
| Guaranteed Break-Even Period | 1 year | 3 years | 1 year |
| Minimum Total Premium | HK$ 6,000 | HK$ 150,000 | HK$ 1 |
| Guaranteed Return Ratio at Maturity | 113% | 107.7% | 107.7% |
| Product | C Company Plan 2 | B Company Plan 1 | B Company Plan 1 | C Company Plan 2 |
| Premium Payment Period | 1 year or upfront | 1 year or upfront | 3 years | 2 years |
| Guaranteed IRR at Maturity | 2.25% | 2% | 2% | 1.76% |
| Guaranteed Break-Even Period | 3 years | 1 year | 1 year | 3 years |
| Minimum Total Premium | HK$ 10,000 | HK$ 18,000 | HK$ 18,000 | HK$ 10,000 |
| Guaranteed Return Ratio at Maturity | 106.9% | 106.1% | 104.1% | 104.5% |
1-Year Plan
| Product | H1 Company Plan 2 |
| Premium Payment Period | 1 year or upfront |
| Guaranteed IRR at Maturity | 4.01% |
| Guaranteed Break-Even Period | 1 year |
| Minimum Total Premium | HK$ 60,000 |
| Guaranteed Return Ratio at Maturity | 104% |
Important Notes on HKD Short-Term Savings Insurance
Early Surrender May Result in Losses
Short-term savings insurance plans in Hong Kong markets have guaranteed break-even periods ranging from 1 to 5 years. Surrendering before the break-even period can lead to losses. For a 5-year plan, W Company offers a guaranteed return in 2 years; for a 3-year plan, W Company, Z Company, and B Company guarantee a break-even in the first year.
Take a 5-year savings plan from small H Company (with a 2-year premium payment period) as an example—if you surrender in the first year, the guaranteed Internal Rate of Return (IRR) could drop to -13.46%, highlighting the potential losses from early surrender.
So, before buying, make sure to check the break-even period and surrender policy for each plan, and understand the potential losses from early surrender. Of course, it’s best to stick to the policy term to maximize your returns.
Understand the Insurance Company’s Financial Status
Savings insurance differs from bank fixed deposits because the premiums you pay aren’t protected by any deposit insurance scheme. That’s why, before buying, you need to thoroughly understand the insurer’s operations, financial condition, and credit ratings. If the insurance company fails to meet its obligations, you could lose all your premiums and the coverage outlined in the policy.
Why ‘Buy Term and Invest the Rest’ is More Secure Than Investment Savings Whole Life Insurance
Besides opting for whole life insurance with lower guaranteed returns (you can use Bowtie’s exclusive BTIR Calculator to get a handle on the actual returns of these policies) , you might consider the ‘Buy Term and Invest the Rest’ strategy. This means getting pure protection term life insurance and pairing it with short-term savings insurance or other investment products that offer higher guaranteed returns. It’s a smart way to get life coverage and solid savings growth without breaking the bank.
Bowtie Term Life is a term life product that provides a lump-sum payout to beneficiaries upon the insured’s death. Its key features include:
- Pure protection with no savings component
- Up to 40 times the coverage for the same premium compared to typical savings life products*
- As low as $38 per month for every $1 million in coverage
- * Based on the standard premium calculation for a 35-year-old non-smoking female with $1 million coverage; For Term Life Insurance: The data is from July 1, 2020, representing standard premiums for 20-year term life insurance in the market.
Sources
- 1 Compare Short-Term Savings Insurance | 10Life
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