How to buy Critical Illness Insurance?
How to buy Critical Illness Insurance in Hong Kong?
Currently, there are 4 main ways to buy Critical Illness Insurance in Hong Kong:
1. Buy directly from insurance companies online
With InsurTech becoming more prevalent, more and more insurance companies are offering online insurance options. Applicants can apply for insurance online by filling out a health declaration form and submitting an application.
For example, with Bowtie, the insured person only needs to fill out a health declaration form mainly consisting of multiple-choice questions online, without the need for additional physical examinations. The underwriting system will automatically approve about 80% of cases based on the answers provided by the applicants, ensuring that the entire process is convenient and smooth, and can be completed anytime and anywhere.
2. Buy through intermediaries (Broker/Agent)
If the applicant is unable to choose his/ her most suitable insurance option, he/ she can also entrust an insurance intermediary to analyze the options. Generally, intermediaries are divided into two types:
- Agent: Only represents the Critical Illness Products of affiliated insurance companies; and
- Broker: Provides Critical Illness Insurance products from different banks and insurance companies.
If applicants are interested in purchasing insurance, intermediaries will assist in filling out relevant documents. If the applicant is old or has a history of serious illness, the intermediary may require him/ her to undergo a physical examination first. After the applicant has provided all the necessary information, the intermediary will submit it to the insurance company’s “Underwriting Department” for review and inform the applicant about the underwriting result.
3. Buy through banks
Many banks in Hong Kong provide various insurance agency services. If necessary, licensed insurance consultants at the branch will select the most suitable plan for the applicants based on their individual needs from affiliated insurance companies or other insurance companies’ Critical Illness Insurance products.
The process of purchasing insurance through a bank is generally similar to that through an intermediary, and personal health information needs to be provided to the insurance consultant. If necessary, the applicant may be required to undergo a physical examination. After ensuring that all documents are complete, the bank’s insurance consultant will submit them to the bank’s “Underwriting Department” for review and inform the applicant about the underwriting result.
4. Buy through online comparison platforms
With a wide range of Critical Illness Insurance products on the market, various insurance comparison platforms have emerged to facilitate comparison among different products. These online platforms are generally operated by third parties, so they can provide customers with more comprehensive product information by comparing and analyzing products from a more neutral perspective.
If the applicant picks a suitable plan on the platform, the website will refer the insurance application to the relevant insurance company’s website or provide contact information for the company’s licensed insurance consultant. The final underwriting result depends on the insurance company’s arrangement, and the platform will not actively follow up on quotes and application procedures.
Compare Different Methods of Buying A Critical Illness Insurance
|Directly buy insurance online through the insurance company’s website||Buy insurance through an intermediary||Buy insurance through a bank||Buy insurance through an online comparison platform|
|Critical Illness Products provided||The Critical Illness Insurance provided by the insurance company||Critical Illness Insurance provided by one or more insurance companies||Critical Illness Insurance provided by a single insurance company||Critical Illness Insurance provided by multiple insurance companies.|
|Sales model||Customers buy insurance on their own||One-on-one proactive sales||One-on-one proactive sales||Passive sales.|
|Way of Application||Anytime, anywhere||Need to accommodate the intermediary’s schedule||Need to accommodate the bank’s office hour||Anytime, anywhere|
|Specialist analyzes needs||✘||✔||✔||✔|
|Charge commission||✘||✔||✔||Depends on the insurance company chosen|
|After-sales service||✔||✔||✔||Depends on the insurance company chosen|
Bowtie pioneered the online underwriting system, in which 95% of the questions are multiple-choice, allowing customers to easily buy insurance anytime and anywhere. To help customers clarify their personal needs and risks, Bowtie provides a comprehensive and multi-angle Critical Illness Insurance Buying Guide, as well as a Livechat service to answer any questions about purchasing insurance in real time, ensuring a smooth and convenient process.
Application Procedures & Documents Required
The application procedures and documents required vary among different insurance companies.
Generally, the applicant needs to provide the following information:
- Personal identification
- Personal health condition
- Family medical history
- Personal medical history
- Physical examination report
- Credit card payment authorization
- Contact information
Unlike traditional insurance companies, Bowtie is committed to simplifying the application process and eliminating the need for a physical examination. Customers only need to answer a health declaration form that consists mainly of multiple-choice questions to determine if they can pass the underwriting process and receive an instant quote for the next five years. Before successful application, customers do not need to provide important personal information such as name, contact phone number, ID number, payment details, etc., allowing them to complete the process in a stress-free and transparent manner.
Please Pay Attention To The Following Points Before Buying
1. Check if the coverage meets your needs
There is no standard definition for critical illnesses and coverage among insurance policies. It is recommended that the applicant should understand the definitions of the insured illnesses, the maximum and minimum ages of coverage, and the non-insurable occupations of each plan, to avoid the embarrassment of claim denial in future.
2. Check if the coverage amount is sufficient
The main function of Critical Illness Insurance is to provide a lump-sum compensation payment to the insured in case of a serious illness diagnosis, to make up for the loss of income during the period of treatment. Therefore, it is generally recommended that the coverage amount should be at least 2 to 3 times his/ her annual income, so that the insured can focus on treatment and recovery without sacrificing their original quality of life.
3. Check the required coverage period
Critical Illness Insurance can be broadly classified into two types: Term Critical Illness and Whole-life Critical Illness. The former has a shorter coverage period, usually ranging from 1 to 20 years, while the latter has a coverage period that lasts for life but at a much higher premium cost. Although a longer coverage period may seem better, as mentioned earlier, Critical Illness Insurance is a product designed to protect income, so the actual role of Critical Illness Insurance is not significant after the policyholder retires.
4. Pay attention to the survival period
To prevent people from purchasing insurance while they are already ill, most Critical Illness Insurance policies have a survival period clause, which means that the insured must survive for a specified period from the first day of diagnosis of a designated critical illness to be eligible for a claim, otherwise, the insurance company may refuse to compensate and declare the policy invalid. Based on various Critical Illness Insurance plans in the market, the median survival period is ranging from 30 to 45 days.
5. Pay attention to the restrictions on “Multiple Claims”
Many common critical illnesses such as heart disease, stroke, and cancer have a risk of recurrence, meaning that a lump-sum payment may not be sufficient to meet the policyholder’s needs. Therefore, some insurance companies have introduced critical illness plans with “Multiple Claims” that provide two or more coverage limits. However, the policyholder should carefully understand the restrictions, such as some insurance companies do not pay out for the recurrence of cancer of the same organ, etc.
6. Determine if a savings-type critical illness policy is needed
Critical Illness Insurance can be divided into savings-type and consumption-type. Compared with the pure protection of consumption-type Critical Illness Insurance, savings-type insurance uses part of the premium as an investment to accumulate cash value, so the premium is generally more expensive, and the payment period is longer. It is worth noting that the return on savings-type policies is “non-guaranteed” and may be affected by factors such as the insurance company’s investment return, claims, and profits, resulting in a return that may be less than expected.
During the insurance application process, the applicant has a responsibility to disclose their immediate family members’ medical history truthfully, such as whether their parents have heart disease or if their siblings have had cancer. As many serious illnesses have a genetic tendency, if the applicant’s immediate family members have relevant medical histories, the likelihood of the applicant becoming ill will also increase, which directly affects the final insurance premium.
Basically, almost all insurance companies require applicants to provide information about their family medical history, personal health status, occupation, age, etc., as a basis for assessing the applicant’s risk during underwriting. Understanding that customers may be concerned about privacy issues, Bowtie goes one step further and promises not to request personal information such as name, address, contact information, ID number, etc. until the insurance application succeeds, committed to creating a more secure and comfortable insurance experience.
According to the Insurance Authority, “Material Fact” refers to any information that may affect the insurance company’s approval, including the applicant’s health status and medical history.
If the applicant fails to declare honestly, the insurance company has the right to refuse compensation or even cancel the policy immediately due to “failure to disclose material facts.”
The “Waiting Period” refers to the period from the policy effective date to the date on which the policyholder can apply for a claim.
For example, Bowtie Critical Illness has a 90-day waiting period, and any designated serious illness diagnosed during this period will not be covered.
Most Critical Illness Insurance policies have a “Cooling-off Period,” which means that the policyholder has the right to request a refund of the premium paid and cancel the policy within a specified number of days after signing the policy.
A physical examination is not a necessary procedure for applying for Critical Illness Insurance.
However, to make more accurate and reasonable underwriting decisions, insurance companies may still require applicants with higher health risks to provide medical examination reports.
As the first virtual insurance company in Hong Kong, Bowtie adheres to the concept of “Simplifying Complexity.” Applicants only need to provide detailed information about their past and existing medical conditions, such as the names of medications they are taking, hospitalization records, medical records, etc., without the need for a physical examination.