Hong Kong insurance products at a glance: participating savings, whole life, critical illness, medical, universal life and annuities

Personal insurance products in Hong Kong can be grouped by what the money is mainly for: pure protection (term life, critical illness, medical), savings (whole life, participating savings plans, universal life, annuities) and investment-linked (investment-linked assurance schemes, ILAS, and indexed universal life, IUL). What fundamentally separates the three groups is whether there is a cash value, whose investments drive that cash value, and how much of it is guaranteed.

Jurisdiction: Hong Kong. Definitions follow the Insurance Authority (IA) consumer education website. Each product type is covered in depth on the pages linked below; this page does not compare specific companies or products.

Three groups: protection, savings and investment-linked

One line from the IA is a useful rule of thumb: in general, products with a higher proportion of guaranteed benefits offer a higher degree of protection. When comparing similar products, look first at the guaranteed share of total benefits and then at the non-guaranteed part.

Life cover: term life and whole life

Term life provides death cover for an agreed period. The IA defines it as a "pure protection product": there is no accumulated cash value when the policy ends, and renewal is usually guaranteed up to a specified age. For the same sum assured its premium is usually the lowest, which makes it suitable for filling a protection gap during specific life stages such as a mortgage or children's education. Term life underwriting and Hong Kong–Singapore comparisons are covered on our sister site term.hk.

Whole life provides lifelong death cover for the life insured and builds up a cash value. The IA specifically warns that early surrender can cause a significant financial loss, and the amount a policyholder gets back may be far less than the premiums paid. Whole life can be non-participating (guaranteed benefits only) or participating (guaranteed benefits plus non-guaranteed bonuses). In the Hong Kong market the latter is often called a "participating savings plan" or simply a "savings plan"; see the next section.

Life cover: participating savings and endowment

The IA defines "participating" as a feature: the insurer provides non-guaranteed benefits to policyholders by distributing annual dividends or reversionary bonuses, and the amount eventually received may be higher or lower than projected in the benefit illustration. A "participating savings plan" is therefore not a separate statutory product type but "whole life or endowment + a participating feature".

An endowment policy pays a maturity benefit at the end of an agreed term, and the IA notes that it has a larger savings element than whole life. Most participating savings plans on the Hong Kong market are built on a whole life chassis, with relatively low death cover and relatively high long-term cash value.

For where bonuses come from, how the three types of bonus differ and why early surrender is so costly, see How participating savings and whole life policies work. To check how far bonuses have been delivered, see How to read fulfilment ratios.

Universal life and investment-linked assurance schemes (ILAS)

Universal life (UL) places premiums, net of charges, into a policy account. In the IA's definition, the account value grows with non-guaranteed interest paid by the insurer, and if money is withdrawn from the account, the death benefit is reduced accordingly. Compared with participating policies, the non-guaranteed part of universal life takes the form of a "crediting interest rate" rather than bonuses. Under the GL16 Interpretation Notes (effective 1 January 2024), insurers must disclose historical crediting rates for universal life by product series for at least the past 10 calendar years, weighted by account balance and excluding one-off bonus interest.

Traditional non-linked universal life is generally subject to GL16. Indexed universal life (IUL) credits interest linked to index performance and is Class C linked long term business; in March 2025 the IA and the HKMA issued a joint circular on IUL for professional investors. In-depth coverage of universal life and IUL, and Hong Kong–Singapore comparisons, are on vul.hk.

With an investment-linked assurance scheme (ILAS), the account value moves with the performance of the funds or assets chosen by the policyholder, who bears most of the investment risk. According to the IFEC (20 February 2023), from 1 January 2015 the minimum death benefit of an ILAS must be 105% of the account value, and the product key facts statement must meet SFC disclosure requirements.

Health cover: critical illness, medical and VHIS

Critical illness insurance pays a lump sum when the life insured is diagnosed with an illness listed in the policy. The money can be used for anything and is often used to replace lost income during treatment. The IA notes that critical illness policies generally have a waiting period of 60 to 90 days, longer for some illnesses, and that cover and payout percentages for early-stage illnesses vary by product. The Hong Kong Federation of Insurers' best practice guidelines on standardised critical illness definitions apply to new critical illness products launched on or after 1 September 2026.

Medical insurance reimburses actual hospital and treatment costs within limits. Hong Kong fully implemented the Voluntary Health Insurance Scheme (VHIS) on 1 April 2019. Certified Plans must meet minimum requirements, including guaranteed renewal up to age 100, no lifetime benefit limit (except for qualifying Flexi Plans) and cover for unknown pre-existing conditions that increases year by year, plus a 21-day cooling-off period. Premiums for Certified Plans are tax deductible up to HK$8,000 per insured person, provided the policyholder is a Hong Kong taxpayer.

For waiting periods, survival periods, tax deductions and points for mainland visitors on both types of cover, see Critical illness and medical insurance.

Annuities: immediate, deferred, QDAP and the HKMC Annuity Plan

An annuity turns one or more premiums into a regular income. An immediate annuity starts paying soon after the premium is paid; a deferred annuity starts paying after an accumulation period. By payout period, annuities are further divided into whole life annuities and fixed-term annuities.

QDAP premiums, together with MPF tax-deductible voluntary contributions, are deductible up to HK$60,000 a year in total, provided the policyholder is a Hong Kong taxpayer. The premium cap for the HKMC Annuity Plan has been adjusted in the past; rely on the current terms on the HKMC Annuity Limited website. For how to choose an annuity, see Choosing an annuity in Hong Kong.

Matching needs to product types

For residents of Mainland China, all of the above must be applied for and signed in person in Hong Kong, are subject to mainland foreign exchange rules and reporting of overseas income, and generally do not benefit from the tax deductions; see Mainland visitors buying in Hong Kong. A twelve-dimension comparison of six product types is at Six Hong Kong product types compared.

If you would like help working out a suitable combination of cover for your circumstances, you can register your needs through the contact details on this site.