Life insurance

Important matters to consider before taking out a life insurance policy

When purchasing life insurance, you should assess your current insurance protection and financial needs. You also need to consider the duration of the policy, the amount you can afford to pay for the premiums, and the amount and type of insurance benefits, including but not limited to death benefit, surrender benefit and maturity benefit. Any penalties applicable at the time of surrender or cashing in early are equally important.

You should also pay special attention to the following matters:

  1. Disclose fully and accurately all information in the application/proposal form. Ask the insurance agent to explain fully the implications of the questions contained in the application/proposal form. If in doubt as to whether a fact is material, it is better to disclose it. If you do not truthfully answer questions about your occupation, state of health, smoking habit, etc. before the policy starts, the policy may be subsequently invalidated by the insurer.
  2. Check personally if all the relevant facts are included in the application form. Your signature on the form is taken as evidence that you are satisfied with the facts.
  3. Make sure you understand the scope of coverage.
  4. Read the policy carefully, in particular, any exclusion clauses.
  5. Given the large number of insurers available in Hong Kong, you should consider obtaining several quotations for comparison before committing yourself to an insurance policy. You should look for an insurance company that provides good security, reputable claims service, reasonable prices and prompt documentation.