10 Key Advantages of Buying VHIS Policies

Standardized Terms 

All Standard VHIS policies on the market provide similar terms and coverage, and only minor changes are allowed to be made, meaning the terms in “Standard Plan” are standardized, and coverages offered by different insurance companies are generally the same.

As for the Flexi VHIS, insurers have the flexibility to provide more benefits and coverages, but they need to provide basic protection as in Standard Plan for the Insured Person, so most of the terms are also standardized. 

Standardized terms can certainly help consumers to compare plans easily.

Transparent Premiums

In order to improve transparency, and make it easier for consumers to review and compare, insurance companies participating in the scheme are required to publish premiums tables for their approved products (for both Standard or Flexi Plan).

Premium tables for all approved products can be found transparently on the Health Bureau’s official website of the VHIS.

Most Voluntary Health Insurance Plans impose no lifetime coverage limit, with cover continuing until the insured reaches 100 years of age. The benefit amount is recalculated annually.

Only “flexible plans” meeting the following requirements may impose lifetime coverage limits, providing protection for individuals requiring higher coverage:

• The annual coverage limit must be at least HK$5 million
• The lifetime coverage limit must be at least HK$20 million or four times the annual coverage limit, whichever is higher
• At least 10 of the 12 standard cover items stipulated under the Standard Plan framework must have no individual cover amount limits

Policyholders who have taken out this type of “Flexible Plan” may, upon policy renewal, opt to transfer to the “Standard Plan” without undergoing re-underwriting. In other words, even if the lifetime cover limit has been exhausted, they may continue to receive cover under the “Standard Plan”.

Whilst the Department of Health does not regulate how insurers determine premiums, all authorised products (including the Standard Plan and Flexi Plan) must meet or exceed the minimum product standards required under the Voluntary Health Insurance Scheme. Consequently, the level of cover provided by insurance products has been enhanced.

Voluntary Health Insurance products will not refuse renewal due to changes in the policyholder’s health condition, increasing age, or claims history after the policy commences. On the contrary, Voluntary Health Insurance guarantees policyholders renewal at least until the age of 100.

Taxpayers purchasing recognised products under the Voluntary Health Insurance Scheme for themselves or specified relatives (including spouses and children, grandparents, parents and siblings of the taxpayer or their spouse) may claim tax deductions by retaining premium statements as supporting documentation. The maximum premium deduction per insured person per tax year is $8,000.

Calculated at the highest standard tax rate* (17%), the premium for each insured person could save the taxpayer up to HK$1,360 in tax.

Formula: HK$8,000 x 17% = 1,360

“Pre-existing conditions unknown at the time of application” refers to health conditions or illnesses that existed at the time of application but were not recognised by the applicant. To manage risk, most standard medical insurance products on the market exclude “pre-existing conditions” from coverage. This means that regardless of whether a diagnosis was made before application, “pre-existing conditions” are generally not covered. However, Voluntary Health Insurance products may still provide coverage for such conditions.

During the initial three-year “waiting period” after the policy commences, Voluntary Health Insurance provides partial coverage for pre-existing conditions unknown at the time of application:

• Year 1: No claims payable
• Year 2: 25% of the coverage limit payable
• Year 3: 50% of the coverage limit payable

Full claims become payable from Year 4 onwards.

Bowtie Pink Voluntary Health Insurance and Bowtie Voluntary Health Insurance Flex Plan further reduce the waiting period for pre-existing conditions unknown at the time of application to 90 days, enabling insured persons to receive 100% cover sooner.

Whilst conventional insurers may exclude congenital conditions from claims, the Voluntary Health Insurance Scheme includes congenital diseases within its scope of cover. It provides coverage for the diagnosis and treatment of congenital conditions that manifest or are diagnosed after the insured reaches the age of 8, with reimbursement arrangements identical to those for pre-existing conditions unknown at the time of application.

The Voluntary Health Insurance Scheme features a dedicated coverage category for “specified diagnostic imaging tests,” encompassing computed tomography (CT) scans, magnetic resonance imaging (MRI) scans, and positron emission tomography (PET) scans conducted during hospitalisation or outpatient visits.

As these medical examinations are relatively expensive, many medical insurance plans on the market categorise them under the “miscellaneous expenses” claim category with low reimbursement limits, resulting in policyholders receiving only minimal compensation.

Under the Voluntary Health Insurance Scheme, policyholders are required to contribute only 30% of the co-insurance costs, with the insurer covering the remaining 70%. Certain Voluntary Health Insurance plans may even exempt policyholders from the 30% co-insurance contribution for specific examinations. Further details may be obtained from the respective insurance providers.

Some may ask: Having just purchased a voluntary health insurance product, but changed one’s mind a few days later, can this policy be cancelled?

Whether opting for the Standard Plan or Flexible Plan, policyholders are entitled to a minimum 21-day cooling-off period. Insurers may also offer extended periods at their discretion. This period commences upon delivery of the policy document or notification to the policyholder or their representative, whichever occurs first.

This allows individuals who have taken out Voluntary Health Insurance to reconsider their decision within a reasonable timeframe. During this period, they may cancel the policy at any time and receive a full refund of premiums paid.

The fast pace of urban life has led to a sharp increase in modern individuals suffering from mental health issues and illnesses. Among medical insurance plans available on the market, few insurers cover hospitalisation and medical treatment related to psychiatric illnesses. The Voluntary Health Insurance Scheme, however, provides coverage for psychiatric treatment up to a maximum of $30,000 per year.

Policyholders of the Voluntary Health Insurance Scheme who are hospitalised in Hong Kong hospitals and receive psychiatric treatment under the recommendation of a specialist doctor will have eligible expenses covered by the policy (excluding outpatient and psychological counselling).

While the Voluntary Health Insurance Scheme offers numerous benefits, consumers are advised to thoroughly understand the product details, premiums, policyholder rights and responsibilities, as well as the insurer’s background, operational model and services before selecting the most suitable medical insurance product based on individual needs and financial capacity.

Bowtie Voluntary Health Insurance stands out from other voluntary health insurance schemes by leveraging technology to reduce costs, enabling everyone to obtain equivalent cover at the lowest possible price!