Among the many options of insurance, Hong Kong savings insurance has attracted much attention in recent years, and today we will discuss it!
Hong Kong, as a well-known international financial center, has a prosperous and highly developed insurance market for all to see.
With a series of significant advantages, such as attractive high dividend rates, diversified currency options, intimate global claims services, excellent flexibility and customization services, and cutting-edge product design, Hong Kong insurance presents a rich and colorful picture for global investors and provides a large number of choices.
The classification of insurance in Hong Kong is similar to that of insurance in the Mainland, mainly including protection type and savings type.
The protection type mainly covers medical, critical illness, life, accident and other aspects; The savings type reflects more of the characteristics of financial management and is a product with long-term cash flow characteristics.
Let's take a look at this astonishing set of stats:
In 2023, the premiums of new Hong Kong policies for mainland visitors reached HK$58.972 billion, a 27-fold year-on-year surge!
In the first quarter of 2024, the premiums of mainland visitors to Hong Kong reached HK$15.6 billion, a sharp surge of 62.5% year-on-year. Among them, whole life insurance (including participating savings insurance and leveraged life) accounted for 77.5% of the premium, and short-term savings insurance also accounted for 14.5%.
Why are investors so interested in Hong Kong savings insurance?
The key lies in its impressive rate of return. The fixed interest rate of savings insurance in mainland China is around 3%, while the compound interest rate of savings insurance in Hong Kong can usually reach more than 7%.
For example, if you also insure 1 million yuan for five years, in the long run, the difference in income may be beyond imagination, and the maximum difference after 70 years can even be 92.27 million yuan!
The core reason why the income of savings insurance in Hong Kong is so high is that there are differences in the investment direction and regulatory model of insurance funds between the two places.
Hong Kong insurance companies mainly invest in two types of assets: one is fixed income assets, such as government bonds, corporate bonds, etc.; The second is equity assets, such as listed company stocks, hedge funds, private equity and commercial and residential properties.
Moreover, the investment scope covers global assets, which is not limited by preset interest rates, and the proportion of investment in equity assets can reach up to 75%.
Hong Kong Savings Insurance also has a number of outstanding advantages.
It can realize the allocation of global assets, and supports the conversion of up to 9 currencies such as US dollar, Hong Kong dollar, Chinese yuan, euro, pataca, British pound, Australian dollar, Canadian dollar, Singapore dollar, etc.
This provides great convenience for customers to adjust the currency of the policy according to their future needs, making the policy much more flexible and practical.
It also allows for policy splitting, which can be distributed to different insureds or beneficiaries based on needs.
In addition, the death benefit can be paid in installments according to the customer's wishes, which is similar to the function of a trust, helping the beneficiary to plan and use the compensation more reasonably and avoid the risk of fund management caused by the one-time payment.
Most of the insurance companies operating in Hong Kong are among the world's top multinational insurance companies.
12 of the world's top 20 insurers are licensed to operate insurance businesses in Hong Kong.
There are long-standing companies, such as the United Kingdom Prudential Group founded in 1848, the France AXA Group founded in 1817, Manulife Life Insurance founded in 1887, AIA Insurance established in 1919, and insurance giants such as Chinese Life (Overseas) and Bank of China Life Insurance with Chinese background.
In addition, Hong Kong's sound legal system and strict regulatory mechanism provide policyholders with a high degree of integrity protection and comprehensive protection of rights and interests.
It is worth mentioning that there has never been a bankruptcy of a life insurance company in Hong Kong.
However, investing in Hong Kong savings insurance is not without any worries.
First of all, it's not suitable for all investors. If you are planning to migrate and study abroad, or if you are a true long-term investor and need to diversify your assets, then Hong Kong savings insurance may be an option worth considering.
At the same time, it is necessary to have a rational understanding of Hong Kong insurance dividends and a comprehensive consideration of the exchange rate, which are also crucial when investing in Hong Kong savings insurance.
So, how to invest in Hong Kong savings insurance?
First of all, it is necessary to formulate a scientific and reasonable insurance plan according to your own financial situation, needs and risk appetite.
If you have a long-term unneeded amount of money and are looking to grow your assets through global asset allocation, Hong Kong Savings Insurance can be considered.
Secondly, choosing an insurance company is crucial.
It is important to pay attention to whether the solvency of the insurance company is strong, whether the risk rating is high, and whether the investment income is good.
Ratings like Standard & Poor's, Moody's and Fitch are internationally recognised and authoritative indicators, and it's important to make sure that the insurer you choose performs well in these areas.
Among the 53 long-term insurers operating in Hong Kong, international brands such as Prudential, AIA, Manulife, AXA and Metropolis, local brands such as HSBC, FTLife, FWD and MassMutual and Chinese brands such as Bank of China, China Life, Taiping and CPIC have their own unique characteristics.
Then we have to look at the yield of the product.
Like savings insurance in the Mainland, the income of savings insurance in Hong Kong is determined by the cash value.
This cash value is divided into guaranteed and non-guaranteed portions.
In the guarantee part, the guaranteed cash value at the end of each policy year will be clearly listed in the contract as part of the policy contract, and you can get as much as you write.
The non-guaranteed part, which is the dividend part, is the main source of our income.
The dividend portion may be higher or lower than the demo rate. However, through the previous screening of insurance companies, coupled with the income smoothing mechanism of Hong Kong insurance companies, we can basically ensure that our dividend income will not be too low.
At the same time, be sure to pay attention to the fulfillment ratio.
Let's say the insurance company shows a profit of $50 in the contract. If $50 is paid at maturity, the fulfillment ratio is 100%. If only $40 is given, the fulfillment ratio is 80%.
The fulfillment ratio is open and transparent, and the insurance company will announce it once a year, and you can check it on the official website.
Of course, the historical fulfillment ratio only represents the past, and we cannot overly rely on past data to speculate on the future, but a company with a historical fulfillment ratio of 100% also reflects its investment and operation capabilities.
Finally, it depends on the extraction method and the strength of the discount.
In 2024, all insurance companies in Hong Kong have launched iterative products with fast withdrawal of funds.
Extraction plans for various 556, 566, and 567 became the main selling point of the product.
The update of fast withdrawal can be said to be the greatest sincerity of the insurance company to the customer. After all, the sooner the policyholder can withdraw the funds and enjoy the benefits, the better.
Insurers in Hong Kong are extremely competitive, and their preferential packages are adjusted every quarter.
It is perfectly legal for mainland investors to buy insurance in Hong Kong.
According to the Insurance Companies Ordinance (Chapter 41 of the Laws of Hong Kong), it is legal for insurance companies authorized in Hong Kong to recommend life insurance in Hong Kong, regardless of whether they are Hong Kong locals, foreigners or Chinese mainland persons. Of course, the premise is that you must be insured in Hong Kong.
In short, Hong Kong savings insurance has its own unique advantages, but good planning and rational investment are the fundamental ways. I hope that friends can make careful choices on the road of investment and find a reliable way to grow their wealth!