II. Life and medical/health insurance

Life insurance is used to provide a cash sum on the death of an individual (i.e. the insured person). Apart from this type of coverage, other types of protection can also be included as supplements to a life insurance policy, e.g. against a critical illness or disability. These protections may also be combined with a savings option in the same policy. Some of the major types of life insurance are summarized as follows:

Term Life

A "Term Life" policy pays a lump sum (also called "death benefit") only upon the death of the policyholder/the insured person. It does not provide dividends. Term policies are of a fixed duration, for example 10 or 20 years. If no claim is made, the policy will cease after this time.

Whole Life

A "Whole Life" policy can provide a cash value for the policyholder during his/her lifetime, or provide a lump sum plus dividends to the policyholder's beneficiary upon the death of the policyholder. Premiums are usually paid to the insurance company at regular intervals, and the premiums are then invested by the company to generate dividends for the policy. It performs savings as well as protection functions.

Endowment

An "Endowment" policy pays out a lump sum upon reaching an agreed date (irrespective of whether the policyholder has died or not), and thus providing a savings function for the policyholder. It also pays a death benefit should the policyholder die before the agreed date, and thus providing a protection function as well.

  1. What is meant by a "cooling-off period"? If I have just purchased a life insurance policy but have second thoughts a few days later, can I cancel this policy?
  2. My insurance agent asked me to transfer my existing life policy to another insurance company. Are there any potential losses arising from such a transfer?
  3. What is meant by a "contestable period" in relation to life insurance?
  4. What is the effect of a "suicide clause" in a life insurance policy? Other than on life insurance, what is the impact of this clause on medical/health insurance if the policyholder has tried to commit suicide, but only injured himself?
  5. The insurance company appointed a doctor for my medical check-up before approving my insurance application. That doctor failed to discover a health problem that I did not disclose. Can the insurance company use this non-disclosure to deny any claims I may subsequently make under the insurance policy?
  6. What are the differences between a "revocable beneficiary" and an "irrevocable beneficiary"? Under what circumstances can I change an irrevocable beneficiary in my life insurance policy?
  7. My son is now 15 years old. Can I name him as the beneficiary in my life insurance policy? Would he be entitled to receive all the proceeds if I die before he reaches the age of majority (i.e. the age of 18)?
  8. The insured person has disappeared for several years. Can the beneficiary submit a claim for the death benefit under the relevant life insurance policy?
  9. Will medical reports issued by traditional Chinese medical practitioners be accepted by an insurance company when processing claims?
  10. I took out an insurance policy in Hong Kong but I was injured in a foreign country. Will this affect my claim?
  11. Can a person under 18 years of age purchase a life insurance policy?
  12. If my insurance policy has lapsed and I try to "reinstate" my policy by paying the premiums again, can I submit any claims to the insurance company at this stage?
  13. I have taken out several insurance policies covering the same risk (e.g. hospital confinement or household damage). Can I claim for the sum insured under ALL policies or just the actual expenses/losses only? Is the claim for the death benefit under life insurance subject to different rules?
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