As I contacted more and more insurance customers, many people asked me about the situation of Hong Kong insurance and US insurance. Today I will talk about my understanding of Hong Kong insurance.
As the demand for wealth management of mainland residents exploded, the demand for family protection increased, and cross-border asset allocation began to be considered. Hong Kong insurance, like milk powder and luxury goods, once became one of the must-buy "specialties" for mainland tourists to go to Hong Kong.
After the epidemic, Hong Kong's closures have been closed, and the insurance volume purchased by mainland visitors in Hong Kong has dropped sharply. Statistics from the Hong Kong Insurance Regulatory Bureau show that in 2020, the number of insurance policies purchased by mainland visitors was only 29,319, a sharp drop of 91.5% year-on-year, and the total premium was HK$6.824 billion, a year-on-year decrease of 84.26%. In 2021, the premium for new policies for mainland visitors was HK$700 million, a drop of 90% from 2020. Compared with the peak of 72.7 billion in 2016, there is only one fraction.
I have once said a point: the more developed the economy, the higher the proportion of insurance assets in the social wealth structure, and the rich love insurance especially, which is no exception in Hong Kong. Under the impact of the closure of the epidemic in 2021, the resilience of new policies in Hong Kong increased by 25% to HK$166.4 billion!
From this we can get a few interesting information: First, Hong Kong people buy insurance and have one-time relationship premiums actually account for 58%. Second, the bank insurance channel is the largest channel, with agents accounting for only 37%, and brokers accounting for 19%.
Why are Hong Kong people buying insurance so crazy under the epidemic? Everyone guess for yourself.
1. Advantages of Hong Kong Insurance
There must be a reason why so many people like to go to Hong Kong to buy insurance.
1. Life insurance premiums are cheap. Insured persons of the same age generally have 1/3 or even half the premiums in Hong Kong than those in the mainland. Because premium rates are calculated based on life expectancy. (The average life expectancy of Hong Kong is 85 years old), and the average life expectancy of China is 75 years old, so the premium is cheap. Assuming that it is also a life insurance coverage of 1 million yuan, if you need a premium of 20,000 yuan in the mainland, it will only cost 10,000 to 15,000 yuan in Hong Kong.
However, with the increase in domestic life expectancy and the inversion of the insurance industry, the price gap between the two sides has been greatly reduced under the same protection. (Shanghai life expectancy in 2022 is 85 years old)
2. Funds can legally enter and exit Hong Kong.
3. Historically, the benefits of savings insurance are higher. The domestic government has been more conservative in the supervision of insurance companies. Therefore, companies restrict more funds in investment and cannot invest overseas, and cannot invest most effectively. Furthermore, the cost structures of insurance companies in the two places are also different. Since Hong Kong insurance companies have good business quality, they can invest in any country in the world, so the rates and dividends are more beneficial to customers.
4. US dollar assets. The Hong Kong policy is either denominated in Hong Kong dollars or in US dollars. To a certain extent, the risk of RMB exchange rate fluctuations is offset.
5. Global guarantee. In addition to mid-to-high-end medical insurance, insurance claims generally require public hospitals of second-level or above. Most Hong Kong insurance products support global claims, including hospitals recognized by the mainland.
Second, the lack of Hong Kong insurance
1. You must go to Hong Kong to buy Hong Kong insurance.
Hong Kong Law Chapter 41 Insurance Company Ordinance stipulates that
Insurers authorized in Hong Kong recommend life insurance in Hong Kong is legal, regardless of whether the sales target is a local Hong Kong person, a foreigner or a mainland Chinese person. The insurance signing place is a legal policy in Hong Kong, and the insurance signing place is an illegal policy outside Hong Kong.
is invalid for signing a contract in mainland China, it is an underground insurance policy and is not recognized. To buy Hong Kong insurance, you must sign a contract in Hong Kong to be valid and is protected by Hong Kong laws.
2. Paying premiums requires opening a Hong Kong account. Foreign exchange controls in mainland China are relatively strict, and redemption of claims is a problem.
Mainland residents only need to pay their first premium in UnionPay or cash when they first come to Hong Kong to take out insurance. All claims and renewal premiums are not required to come to Hong Kong. Customers who renew insurance premiums can open a bank account in Hong Kong and use bank to automatically transfer to pay premiums. Online bank transfers do not require handling fees. As for the transfer amount, the transfer amount will be settled at the exchange rate on the same day.
As I contacted more and more insurance customers, many people asked me about the situation of Hong Kong insurance and US insurance. Today I will talk about my understanding of Hong Kong insurance.
As the demand for wealth management of mainland residents exploded, the demand for family protection increased, and cross-border asset allocation began to be considered. Hong Kong insurance, like milk powder and luxury goods, once became one of the must-buy "specialties" for mainland tourists to go to Hong Kong.
After the epidemic, Hong Kong's closures have been closed, and the insurance volume purchased by mainland visitors in Hong Kong has dropped sharply. Statistics from the Hong Kong Insurance Regulatory Bureau show that in 2020, the number of insurance policies purchased by mainland visitors was only 29,319, a sharp drop of 91.5% year-on-year, and the total premium was HK$6.824 billion, a year-on-year decrease of 84.26%. In 2021, the premium for new policies for mainland visitors was HK$700 million, a drop of 90% from 2020. Compared with the peak of 72.7 billion in 2016, there is only one fraction.
I have once said a point: the more developed the economy, the higher the proportion of insurance assets in the social wealth structure, and the rich love insurance especially, which is no exception in Hong Kong. Under the impact of the closure of the epidemic in 2021, the resilience of new policies in Hong Kong increased by 25% to HK$166.4 billion!
From this we can get a few interesting information: First, Hong Kong people buy insurance and have one-time relationship premiums actually account for 58%. Second, the bank insurance channel is the largest channel, with agents accounting for only 37%, and brokers accounting for 19%.
Why are Hong Kong people buying insurance so crazy under the epidemic? Everyone guess for yourself.
1. Advantages of Hong Kong Insurance
There must be a reason why so many people like to go to Hong Kong to buy insurance.
1. Life insurance premiums are cheap. Insured persons of the same age generally have 1/3 or even half the premiums in Hong Kong than those in the mainland. Because premium rates are calculated based on life expectancy. (The average life expectancy of Hong Kong is 85 years old), and the average life expectancy of China is 75 years old, so the premium is cheap. Assuming that it is also a life insurance coverage of 1 million yuan, if you need a premium of 20,000 yuan in the mainland, it will only cost 10,000 to 15,000 yuan in Hong Kong.
However, with the increase in domestic life expectancy and the inversion of the insurance industry, the price gap between the two sides has been greatly reduced under the same protection. (Shanghai life expectancy in 2022 is 85 years old)
2. Funds can legally enter and exit Hong Kong.
3. Historically, the benefits of savings insurance are higher. The domestic government has been more conservative in the supervision of insurance companies. Therefore, companies restrict more funds in investment and cannot invest overseas, and cannot invest most effectively. Furthermore, the cost structures of insurance companies in the two places are also different. Since Hong Kong insurance companies have good business quality, they can invest in any country in the world, so the rates and dividends are more beneficial to customers.
4. US dollar assets. The Hong Kong policy is either denominated in Hong Kong dollars or in US dollars. To a certain extent, the risk of RMB exchange rate fluctuations is offset.
5. Global guarantee. In addition to mid-to-high-end medical insurance, insurance claims generally require public hospitals of second-level or above. Most Hong Kong insurance products support global claims, including hospitals recognized by the mainland.
Second, the lack of Hong Kong insurance
1. You must go to Hong Kong to buy Hong Kong insurance.
Hong Kong Law Chapter 41 Insurance Company Ordinance stipulates that
Insurers authorized in Hong Kong recommend life insurance in Hong Kong is legal, regardless of whether the sales target is a local Hong Kong person, a foreigner or a mainland Chinese person. The insurance signing place is a legal policy in Hong Kong, and the insurance signing place is an illegal policy outside Hong Kong.
is invalid for signing a contract in mainland China, it is an underground insurance policy and is not recognized. To buy Hong Kong insurance, you must sign a contract in Hong Kong to be valid and is protected by Hong Kong laws.
2. Paying premiums requires opening a Hong Kong account. Foreign exchange controls in mainland China are relatively strict, and redemption of claims is a problem.
Mainland residents only need to pay their first premium in UnionPay or cash when they first come to Hong Kong to take out insurance. All claims and renewal premiums are not required to come to Hong Kong. Customers who renew insurance premiums can open a bank account in Hong Kong and use bank to automatically transfer to pay premiums. Online bank transfers do not require handling fees. As for the transfer amount, the transfer amount will be settled at the exchange rate on the same day.Accounts opened in Hong Kong can process transfers, remittances and account checks through the Internet, or they can directly remit money from domestic banks to insurance company accounts. If you come to Hong Kong every year, you can pay the premium in cash by the way, depending on the customer's personal choice.
In October 2016, UnionPay International issued the "Compliance Guidelines for Accepting Domestic UnionPay Cards for Overseas Insurance Merchants", which clearly requires that domestic residents’ purchases and accidents and other tourism consumption abroad are strictly prohibited from using UnionPay Cards for payment, and the limit of no more than US$5,000 for a single transaction for overseas insurance merchants is strictly implemented.
3. Hong Kong insurance is not protected by the China Banking and Insurance Regulatory Commission.
In April 2016, the original China Insurance Regulatory Commission issued a risk warning, pointing out that Hong Kong insurance policies are not protected by mainland laws, and there are high legal litigation costs when disputes occur, there are risks such as exchange rate risks and foreign exchange policy risks, and insurance cancellation large losses.
4. Different health notification guidelines.
is different from the mainland's limited notice principles, and Hong Kong Insurance advocates unlimited notice. All physical condition and past medical records must be declared voluntarily. If you are not informed completely, as long as there is a problem, you may be rejected for compensation.
5. Flexible rate system.
Domestic insurance, whether it is critical illness insurance, and savings insurance, the fee rate is fixed when buying it. How much money is paid every year when buying it, the benefits will be fixed in the future, but Hong Kong is not. I will talk about this later.
Hong Kong's health insurance rate is also not guaranteed. Of course, this price adjustment is for all policyholders and will not be adjusted blindly. But insurance companies have the power to adjust.
Overall, thanks to the development of Internet insurance and the intra-insurance of the insurance industry, the cost-effectiveness of insurance in mainland China has been greatly improved in recent years, and even the cost-effectiveness of products of large insurance companies has been greatly improved. Hong Kong Insurance includes round-trip costs and post-processing fees, and the money saved is basically contributed to the insurance company. The principle of unlimited notification of
health insurance is that for friends whose health conditions are generally weaker, whose medical insurance card has been prescribed for others, or whose medical insurance card has been lost, there is a hidden danger of claims disputes.
3. Savings insurance comparison
My fellow villager sent me a photo, saying it was AIA's product, and asked me how it was? I have seen this situation many times, basically just sending a message, don’t make a decision at , and you ask the other party to send the insurance contract and insurance plan.
I read the plan, and some of the texts are as follows:
Starting from the end of the 10th insurance year, non-guaranteed cash is distributed every year, called "Annual Red Profit".
expected refund of the total amount refers to the sum of the guaranteed cash value, accumulated disposable guaranteed cash and any interest, accumulated non-guaranteed -year red profit and any interest, and non-guaranteed final red profit.
I asked my fellow villager to ask the other party why there are so many expected and non-guaranteed returns in the plan?
The other party sent a picture explaining that their company's products have high, medium and low-end returns, and they generally use mid-range demonstrations for customers.
As shown in the figure, as time goes by, the proportion of non-margined amounts in the total amount is getting higher and higher, which means that the income of the insurance is increasingly affected by the non-margined amounts, but this is the non-margined amount. Inference: The total income of this insurance is very uncertain and is highly likely to be realized.
Here, let’s summarize:
First, the mainstream domestic savings insurance is fixed income, that is, when purchasing insurance, the amount of fees paid each year and what time the income will be. For example, many excellent increase in lifetime life can achieve a compound interest of 3.47% in 20 years.
Second, mainstream savings insurance in Europe and the United States is elastic income, and the income has two parts: fixed income and elastic income. Fixed income is very low, and elastic income depends on the investment income of the insurance company.
This investment return is very uncertain. Past returns only represent historical performance. Generally speaking, agents will introduce products according to the high returns allowed by regulatory authorities in order to sell products, but this returns cannot be achieved from a long-term perspective.
Note: The supervision requires sales personnel to introduce the three situations of high, medium and low, and explain the risks, but I have never met a sales personnel who do this.
Third, the fixed income of a product is close to 3.5%, the fixed income of a product is very low (even only 1%), and the elastic income is uncertain. These two products cannot actually compare the returns.
Fourth, if you want to gain high returns, why not choose domestic universal insurance? The guaranteed return is 3%, and the current actual return is 4.8%. When the investment performance was good in the past two years, many returns were 6%. Isn’t it more fragrant than the dividend insurance in the overseas market?
Fifth, there are dividend insurances in China, Taikang is a typical example, and I like to sell dividend insurance very much. The actual income is greatly affected by the company's investment level, especially the product structure of dividend insurance + universal insurance. Even senior practitioners have many things that they cannot understand, and the products are very complicated.
Sixth, once there is a dispute over overseas insurance, the common domestic riots are not easy to use. They need to protect their rights according to local customs, practices and laws, and the cost is relatively high.
To sum up, I think the cost-effectiveness of domestic savings insurance is not lower than similar products in Hong Kong and the United States. If you like to gain high returns, it may be better to adopt the form of savings insurance + universal insurance.
Of course, if you are in the following situations, you can consider Hong Kong insurance:
1, the premium budget is very sufficient. You can consider that both mainland insurance and Hong Kong insurance are allocated;
2, high net worth , , overseas asset allocation is required to hedge the depreciation risk of single currency.
is all that I want to say. If you have any other questions, please consult and communicate.
Note: The supervision requires sales personnel to introduce the three situations of high, medium and low, and explain the risks, but I have never met a sales personnel who do this.
Third, the fixed income of a product is close to 3.5%, the fixed income of a product is very low (even only 1%), and the elastic income is uncertain. These two products cannot actually compare the returns.
Fourth, if you want to gain high returns, why not choose domestic universal insurance? The guaranteed return is 3%, and the current actual return is 4.8%. When the investment performance was good in the past two years, many returns were 6%. Isn’t it more fragrant than the dividend insurance in the overseas market?
Fifth, there are dividend insurances in China, Taikang is a typical example, and I like to sell dividend insurance very much. The actual income is greatly affected by the company's investment level, especially the product structure of dividend insurance + universal insurance. Even senior practitioners have many things that they cannot understand, and the products are very complicated.
Sixth, once there is a dispute over overseas insurance, the common domestic riots are not easy to use. They need to protect their rights according to local customs, practices and laws, and the cost is relatively high.
To sum up, I think the cost-effectiveness of domestic savings insurance is not lower than similar products in Hong Kong and the United States. If you like to gain high returns, it may be better to adopt the form of savings insurance + universal insurance.
Of course, if you are in the following situations, you can consider Hong Kong insurance:
1, the premium budget is very sufficient. You can consider that both mainland insurance and Hong Kong insurance are allocated;
2, high net worth , , overseas asset allocation is required to hedge the depreciation risk of single currency.
is all that I want to say. If you have any other questions, please consult and communicate.
