Hong Kong Expat Health & Life Insurance Considerations

Hong Kong Family

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Which Insurance should you have when you move to Hong Kong?

When you move to Hong Kong you might end up better off or worse off when it comes to state benefits: local national health systems, guaranteed income in case of incapacity to work due to ill health or accident, family protection in case of death etc…

Well ahead of your relocation to Hong Kong, it is important to have a close look at the state benefits and other benefits linked to your job for which you will be eligible. If you find gaps in the cover you need (or even gaping holes!), you should be able to find in advance expatriate cover tailored to your needs.

International Expat Health Insurance

Having good health cover is usually a priority for most expatriates in Hong Kong. While some countries have good local national health systems, such as those in Germany, the Netherlands and France, in Hong Kong the need for expatriate health insurance is an absolute necessity.

Evacuation and Repatriation Cover

This cover is often offered as an option with an international health insurance policy.

Definition of Evacuation (only)

In the case of a medical emergency, if in Hong Kong, or where you require treatment does not have the facilities to treat you, you are evacuated (temporarily) to the nearest country with adequate facilities. When the treatment is completed, you are transported back to the country where you have been working as an expatriate.

Definition of Evacuation and Repatriation (both)

This sort of policy has more scope than the evacuation cover only. For instance, assume you had a medical emergency evacuation to the nearest suitable country and your medical condition then stabilised. However, you still need further medical treatment for a full recovery. With this more comprehensive cover, you then could be sent back to your home country for the completion of your treatment.

Alternatively, if the insurance company doctors assessed in the first instance that it was in your best interest to be sent straight back home, then you would be transported directly to your home country for treatment.

However, it is important to note that moving or evacuating a seriously ill or badly injured person can be very difficult and carries health risks of its own. The insurance company must determine a safe method of transport, having regard to the patient’s medical condition. This could mean having to hire a medically-equipped plane or helicopter. The total cost of transport and the affiliated expenses could be in the region of thousands of dollars. This is why the Evacuation and Repatriation option is very useful to have, and is a must for countries without western-standard medical facilities.

International Life Insurance

Life insurance may be used for two purposes:

Family Protection

This is the most frequent use of life insurance. When abroad, the need to have our family financially secure in the case of our death becomes even more of a priority.

Business Protection

There are many reasons why entrepreneurs leave their home country to start a business. The most usual form of start-up is a limited company, with two or more shareholders. However, a problem could occur in case of the death of one of the shareholders: for example, the company may be a few years old and highly profitable, reinvesting its profits each year but without significant cash reserves. As a result of the death of one of the shareholders, his/her beneficiary could demand a high value for the shares, or wish to replace the deceased on the management board. Without cash available to buy back the shares, the option for the deceased’s inheritor to become a board member could result in a nightmarish situation. A number of very good companies go bankrupt each year for this very reason.

The only way to avoid such a situation would be to have a shareholder protection arrangement which would involve: life insurance for the directors, suitable trusts and a binding buy-and-sell agreement. In the UK, the life insurance premium would be tax deductible from the company expenses.

International Income Protection

Unless you are an employee, and the company you are/will be working for guarantees you an income should you be unable to work due to illness or accident, it is necessary to purchase an income protection plan.

Local income protection plans are usually cheaper than international ones, but they should be considered only if they provide international protection.

Insurance Company or Independent International Broker?

Most international insurance companies are excellent and trustworthy. However, the downside for the expatriate is that a company’s sales consultants will promote only their products even if a more appropriate option exists on the market.

Independent international brokers can choose the most appropriate product for you in the international market. Brokers are an economical way for insurance companies to source new business, and whether you go direct or through a broker, your premium will be the same. The downside for the expatriate is that some brokerage sales consultants are incentivised by the amount of commission they bring to the brokerage and could favour products with higher commissions.

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