Health and Life Insurance

Question 1

Premium

Answer 1

People purchase a policy and pay a fee periodically. The amount of premium is based on the probability that you will make a claim.
It’s based on your life expectancy and the projections for the payouts for persons who die

Question 2

Deductibles

Answer 2

The amount of money you have to pay before your insurance company will begin to pay on a claim

The higher the deductible, the lower the premium and vise versa

Question 3

Where you can buy insurance in Hong Kong?

Answer 3

• appointed insurance agents (e.g.AIA, Prudential)
• authorized insurance brokers
• agents in banks (e.g.HSBC)

Question 4

Are the insurance provider regulated in HK?

Answer 4

Only insurers and insurance intermediaries, i.e. insurance agents and insurance brokers, are regulated in Hong Kong.

Question 5

The relevant legal framework for the regulation of insurers is provided by

Answer 5

the Insurance Companies Ordinance

Question 6

Who is responsible for the regulation of the insurance industry?

Answer 6

The Commissioner of Insurance, in his role as the Insurance Authority

Question 7

Outpatient expense insurance

Answer 7

covers doctors’ consultation and medication, specialist’s consultation and medication, Chinese doctors’ consultation and medication, alternative treatment

Question 8

Hospital expense insurance

Answer 8

Hospital room and board and other charges.

Question 9

Surgical expense insurance

Answer 9

Surgeon’s fee for an operation

Question 10

Major medical expense insurance

Answer 10

Covers expenses for a serious injury or long- term illness. Has a deductible and coinsurance.

Question 11

Coinsurance and copayment example

you have $20 copayment plus 20% coinsurance policy. you have a prescription for a generic drug costing $100. how much you and the insurance comp. need to pay?

Answer 11

you: $20 + ($100 - $20) * 20% = $36

insurance comp. : $100 - $36 = $64

Question 12

Comprehensive major medical insurance

Answer 12

Low deductible offered without a separate, basic plan. Covers hospital, surgical, and other bills.

Question 13

Critical illness policies

Answer 13

designed to alleviate your financial concerns should you find yourself facing life-threatening health problems. It’s no cure-all, but if you fall prey to a bout of very ill health, at least you’ll be able to focus your attention on getting well, rather than on making ends meet.

Critical illness insurance provides a lump-sum payment within 30 days of the time the policyholder receives a diagnosis. Such policies cover a host of diseases, including:

• stroke
• heart attack
• cancer
• paralysis
• the need for an organ transplant
• blindness
• disability
• a variety of lesser-known diseases (some policies cover more than 100 conditions)

Question 14

Eligibility

Answer 14

Varies with age, marital status, and

dependency

Question 15

Assigned benefits

Answer 15

Insurance pays your doctor or hospital directly

Question 16

Benefit limits

Answer 16

Fixed amount per day for a hospital room

Question 17

Copayment

Answer 17

Cost sharing in the form of a flat dollar amount you pay before the insurer will pay

Question 18

Coinsurance

Answer 18

the percentage you must pay

Question 19

Declaration Page

Answer 19

• Company name and address
• Your name and address
• Insurance policy number
• Description of property insured
• Effective dates
• Coverage types and limits
• Deductible
• Policy premium amount

Question 20

Life insurance

Answer 20

insurance company promises to pay a lump sum (death benefits) to the designated beneficiary at the time of the policy holder’s death

Question 21

Mortality tables

Answer 21

provide odds on your dying, based on your age and sex

Question 22

Purpose of life insurance

Answer 22

-Protect someone who depends on you from financial loss related to your death.
It is to cover expenses when you die, and help those dependent on your income maintain their lifestyle.
-To leave as part of your estate.
-To pay off a mortgage or debts at the time of death.

-The amount of life insurance you need is based upon your liabilities and those dependent on your income

Question 23

Whole life insurance

Answer 23

-Also called straight life
-Pay fixed premiums for a stipulated period, usually 20 or 30 years, or until you reach a specified age (65)
-Your policy then becomes “paid up” and you remain insured for life.
-Amount of premium depends on your age when you start the policy.
-Provides death benefits and accumulates a cash value.
-Minimum rate of return guaranteed
 You can borrow against the cash value or draw it out at retirement.

Question 24

Why purchase insurance?

Answer 24

cover you asset and protect you personal health

Question 25

Insurance rider

Answer 25

an addendum to your primary coverage to cover sth. specific that is not covered on your primary policy