Introduction
Level, Decreasing and Increasing Terms
Term Life Insurance plans from CCW Global in Hong Kong are flexible and affordable options for life insurance coverage. While all term life insurance plans ensure a death settlement in the event that the insured individual dies during the course of the plan, there are a number of variants on the market which can have an effect on the amount of the settlement being provided.
On this page we will explore specific types of term life insurance coverage.
Coverage
Level Term Life Insurance
The most common type of Term Life Insurance in Hong Kong are plans which provide a level death benefit over the entire course of the policy. This means that no matter how long the policy is in force – be it 5, 10, or even 40 years – the face value (or death benefit) of the policy remains the same for the entirety of the term.
Under a Level Term Life Insurance plan the annual premium of the policy normally remains stable for the entire lifetime of the policy. This, and the fact that the death benefit remains constant, means that a level term life insurance plan is one of the simplest forms of life insurance in the Hong Kong market and means that such a policy can be a convenient solution to a consistent but temporary need.
A Level Term Life Insurance plan in Hong Kong may be used, for example, in the event of a loan which is not being repaid in instalments.
Coverage
Decreasing Term Life Insurance
With a Decreasing Term Insurance plan the death benefit will decrease annually, or at other specified times during the lifetime of the policy, with the annual premium normally remaining constant throughout the term of the plan. Due to the fact that the benefit value of the plan decreases over time a Decreasing Term Life insurance plan is often the cheapest option for life cover.
Decreasing Term Life insurance products often address a temporary financial risk which is decreasing.
Such risks and needs would include:
Mortgage Protection Insurance
With the repayment of a mortgage over many years, the total amount owed to the creditor is reduced over time. As such, a Decreasing Life Insurance plan which offers a death benefit in line with the decreasing amount of the mortgage owed is often referred to as Mortgage Protection Insurance.
Typically, purchasing a Mortgage Protection insurance plan will be one of the requirements of obtaining a mortgage in Hong Kong; a bank will normally mandate that such cover is purchased before providing the loan. When the cover is introduced the Face Value at the time of purchase is reduced over the course of the plan and corresponds to the mortgage repayments.
Mortgage protection insurance plans can be purchased on a Joint Life Basis. This means that it is possible to insure two people under the plan, commonly a Husband and Wife, and have the death benefit payable when the first person dies.
Mortgage Protection Life Insurance is not the same as Mortgage Indemnity Insurance.
Credit Protection Life Insurance
Similar to a Mortgage Protection Life Insurance plan, a Credit Protection Life Insurance policy will pay outstanding credit, or the balance of a loan, to a lender in the event that the life insured die before a full repayment has been made. As the loan is repaid the balance amount reduces which in turn brings down the overall death benefit. This type of coverage is normally only available to banks and other credit providers to cover their borrowers on a group basis.
The main difference between Credit Life Insurance and Mortgage Protection Insurance is that Credit Life Insurance covers the interest of lenders while Mortgage Protection Insurance covers the interest of the borrowers. Additionally, Mortgage Insurance is normally payable even if the loan has been repaid while Credit Insurance will not normally pay a benefit is the credit has been returned.
Family Income Life Insurance
This type of decreasing term life insurance plan can often be linked to other policies which provide lump sum death settlements. The Family Income Life Insurance plan will supplement lump sum payments with monthly benefits paid to the policy’s beneficiaries over a specified period of time.
The total amount payable under a Family Income Life Insurance plan decreases as monthly benefits are provided to the insured’s family consequently making this product a decreasing life insurance plan.
Coverage
Increasing Term Life Insurance
Under an Increasing Term Life Insurance plan the overall death benefit of the policy increases over time. This is normally in line with an agreed index, such as the Consumer Price Index, or at a previously determined fixed percentage.
Increasing Term Life Insurance plans are designed to provide a solution to the problem of inflation, and ensure that the death benefit (which can be substantial at the time of purchase) remains substantial when it is finally paid. The major drawback to an Increasing Term Life Insurance plan is the fact that the premium will generally increase as the benefit increases – making these policies more expensive over time.
Quotation
Free Term Life Insurance Quotes in Hong Kong
If you would like to receive a free quotation comparison for a Hong Kong Term Life Insurance plan, simply complete the short form found here. Once we have received your quotation request an expert Hong Kong Life Insurance Broker will contact you with a comparison overview of all the policies best suited to meet your specific needs.
To learn more about the Term Life Quotation process please click Hong Kong Term Life Insurance Quotes.
You can also Contact CCW to learn more about the coverage offered under a Hong Kong Term Life insurance plan, the premium calculations associated with these policies, or enquire about any of the Hong Kong Insurance products offered by CCW Global.
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