Applying for insurance in Hong Kong: from needs analysis and signing to underwriting and the cooling-off period

Pre-application checklist

Preparing the following five items before meeting an intermediary reduces requests for further documents and repeat trips to Hong Kong:

Seven steps

1. Step 1: Check the insurer's and intermediary's licences

   • What to do: on the IA website, confirm on the Register of Authorized Insurers that the insurer is authorised to write the relevant class of long term business; on the Register of Licensed Insurance Intermediaries, check the intermediary's name, licence number, licence type (agent or broker) and the firm they are attached to.
   • Documents needed: the intermediary's name and licence number (you can ask to see them) and the insurer's full name.
   • Time: an online register search usually takes a few minutes.
   • Who does it: the applicant.
   • Common sticking points: checking only the intermediary's business card without searching the register; not knowing the difference between an agent (who represents the insurer) and a broker (who represents the client); an intermediary recommending investment-linked products when their licence does not cover linked long term business.

2. Step 2: Financial Needs Analysis and product selection

   • What to do: under GL30, the Guideline on Financial Needs Analysis, the intermediary establishes the applicant's protection and savings needs, income and assets, and ability and willingness to pay premiums, and then makes a recommendation. Investment-linked products usually also require a risk profile assessment.
   • Documents needed: the Financial Needs Analysis form (provided by the intermediary) and an outline of income and assets; if you are considering paying premiums with borrowed money, information on the financing as well.
   • Time: usually one meeting; complex cases may take several.
   • Who does it: the licensed intermediary and the applicant together; the applicant signs to confirm.
   • Common sticking points: careless answers leading to a recommendation that does not fit the need; a premium payment term that does not match cash flow; not comparing guaranteed and non-guaranteed benefits. It helps to read Hong Kong insurance products at a glance and Six Hong Kong insurance types compared first and bring your questions to the meeting.

3. Step 3: Read the product documents and complete the application

   • What to do: read the product brochure, the benefit illustration (participating policies must show guaranteed and non-guaranteed benefits separately and give the fulfilment ratio web address) and the relevant Important Facts Statements, then complete the application form, fully and accurately disclosing health, occupation, financial and source of funds information.
   • Documents needed: the identity documents and information in the checklist above, the application form, the benefit illustration acknowledgement page and the various statements.
   • Time: signing is usually completed in one meeting, but allow plenty of time to read the documents.
   • Who does it: the applicant (and the life insured, if different) signs in person; the intermediary explains and witnesses.
   • Common sticking points:
   • Mainland visitors must sign the IFS-MP; see "Additional points for mainland visitors" below;
   • where premiums are paid with borrowed money, the Important Facts Statement for Premium Financing (IFS-PF) must be signed before the policy is issued;
   • when replacing an existing policy, a policy replacement declaration may be required;
   • omitting past medical history: the IA notes that any misrepresentation or non-disclosure may affect future claims or even void the policy;
   • insuring someone else requires insurable interest, which the IA says is generally a family member or spouse.

4. Step 4: Underwriting and medical examination

   • What to do: the insurer assesses the risk based on the application form, health questionnaire and financial information, and may require a medical examination, medical reports or proof of finances.
   • Documents needed: health questionnaire, past medical records or test reports (if any), medical examination report; for higher sums assured, proof of income and assets may be needed.
   • Time: simplified underwriting can be quick; where a medical examination or further medical or financial information is required, it may take several weeks, as notified by the insurer.
   • Who does it: the insurer's underwriting department; medical examinations are carried out by a provider arranged by the insurer; the intermediary passes on requests for further documents.
   • Common sticking points: the IA notes that not every insurer requires a medical examination for each life insured, but the duty of full disclosure is unchanged. The underwriting outcome may be standard acceptance, acceptance with a premium loading, acceptance with an exclusion, postponement or decline; the applicant can ask for the reasons and decide whether to accept. A Hong Kong–Singapore comparison of underwriting is on term.hk.

5. Step 5: Pay the premium and receive the policy

   • What to do: pay the first premium and the insurance levy through a payment channel accepted by the insurer; the insurer issues the policy and delivers the policy documents.
   • Documents needed: proof of payment and the policy documents (including provisions, benefit illustration and policy schedule).
   • Time: the policy is issued once underwriting is complete and the premium received, generally within a few working days to several weeks.
   • Who does it: the applicant pays; the insurer issues; the intermediary delivers the documents or arranges electronic delivery.
   • Common sticking points:
   • Levy: since 1 April 2021 the IA has collected a levy of 0.1% of premium, capped at HK$100 per policy year for long term policies;
   • the payer should be the applicant or a related party accepted by the insurer; third-party payment usually requires additional explanation of the source of funds;
   • mainland visitors must comply with mainland foreign exchange rules; see "Additional points for mainland visitors" below.

6. Step 6: Review during the cooling-off period

   • What to do: on receiving the policy, check every page for the details of the life insured, sum assured, premium payment term, currency, beneficiaries and riders; if you decide you do not want the policy, notify the insurer in writing within the cooling-off period to cancel it.
   • Documents needed: the policy documents, the cooling-off notice and a written cancellation request.
   • Time: GL29 sets a cooling-off period of 21 calendar days for life policies, starting from delivery of the policy or issue of the cooling-off notice, whichever is earlier.
   • Who does it: the applicant.
   • Common sticking points: assuming the cooling-off period starts on the day the application was signed; refunds on cancelled investment-linked policies may be subject to a market value adjustment; where premiums are financed, the financing arrangement affects how the right to cancel can be exercised, so ask before signing.

7. Step 7: After-sales confirmation and annual review

   • What to do: cooperate with the insurer's after-sales confirmation (some insurers make a follow-up call); read the annual policy statement and bonus notice each year; update beneficiaries, the contingent policyholder and contact details when family circumstances change.
   • Documents needed: annual policy statement, bonus notice, change of beneficiary form.
   • Time: a review once a year, plus updates whenever a major life event occurs.
   • Who does it: the policyholder, with help from the intermediary where needed.
   • Common sticking points: not telling the insurer about a change of address; looking only at the "total cash value" rather than the guaranteed and non-guaranteed breakdown; not realising that policy loans and automatic premium loans accrue interest. For how to read bonus notices and fulfilment ratios, see How to read fulfilment ratios.

The steps at a glance

The steps the applicant completes personally are concentrated in steps 1, 3, 6 and 7; the intermediary analyses needs, explains documents and passes on requests for further documents, while the insurer underwrites and issues the policy. If at any step you hear something like "someone can sign for you" or "no need to read it closely", stop and check directly with the insurer.

Additional points for mainland visitors

Applicants holding a PRC resident identity card should note the following in addition to the seven steps (jurisdiction: Hong Kong and Mainland China):

1. Place of signing: the entire sales process must take place in Hong Kong and all documents must be signed in person there; if underwriting requires a further medical examination or additional signatures, another trip to Hong Kong may be needed, so leave room in your travel plans.
2. IFS-MP: since 1 September 2016, applicants for individual long term policies must sign the Important Facts Statement for Mainland Policyholders, which cannot be waived; it sets out the factors and risks to consider when buying a long term policy in Hong Kong.
3. Payment and foreign exchange: public materials from the State Administration of Foreign Exchange, Xiamen Branch, state that foreign currency purchased by individuals in the mainland may not be used to buy overseas life insurance or investment-type return or participating insurance. This site does not describe any route for moving funds out of the mainland or paying premiums.
4. Tax and CRS: policies with a cash value fall within Hong Kong's CRS reporting; for reporting of overseas income, seek professional advice in your own jurisdiction.

The full rules are in Mainland visitors buying in Hong Kong, and claims and complaints after the policy takes effect are covered in Claims, complaints and the Policy Holders' Protection Scheme. If you would like help working through the preparations for your own application, you can register your needs through the contact details on this site.