Tips for Seniors When Purchasing Insurance

As Hong Kong’s population continues to age and life expectancy rises, insurance has become not just a part of financial planning for seniors but also an important safeguard for a secure retirement. Many people consider purchasing suitable insurance products before or after retirement to provide peace of mind for themselves and their families. However, buying insurance involves more than just signing a form; there are several important details to be aware of. The following practical tips can help guide you in making informed decisions during the insurance application process. 

1. Financial Needs Analysis

Every senior has different life circumstances and personal goals. Some may prioritise medical coverage, while others may wish to leave a death benefit for their family or make proper arrangements for their own personal finances. To address these needs, the Insurance Authority requires insurance intermediaries to conduct a "Financial Needs Analysis" when selling life insurance products. This process helps the intermediary understand the client’s objectives and recommend suitable products. As a policy holder, you should clearly explain your needs and concerns to allow the intermediary to provide appropriate advice.

2. Assessing Affordability

After retirement, your income may not be as steady as it was during your working years, making it crucial to consider what you can afford before buying any insurance products. You should let your insurance intermediary know about your financial situation, including your pension, savings, daily expenses and medical costs. The intermediary also has a responsibility to understand your financial circumstances before recommending any products to you. It is not just about whether you can afford the first year’s premium, but also whether you can continue to pay the premiums throughout the entire premium payment period. Remember, if you stop paying for your life insurance midway, the amount refunded is often less than what you have already paid, leading to considerable financial loss.

3. Full and Honest Disclosure of Medical History 

If you plan to purchase medical insurance or any product that requires health underwriting, it is crucial to accurately disclose your health conditions. As we grow older, we may not clearly remember past illnesses or medical history. In this case, the insurance intermediary should help you review and submit the necessary information. Failing to provide honest disclosure could affect future claims or even render the policy invalid. Always remember that truthful disclosure is an essential step in protecting yourself.

4. Post-Sale Call and Cooling-Off Period

According to current regulations, insurers are required to conduct audio-recorded post-sale confirmation calls to all vulnerable customers, including individuals over the age of 65, who purchase life insurance products (except for term insurance). The purpose of this call is to reaffirm that the customers understand the product and its associated risks. In addition, all customers can exercise the right to cancel their policy within the 21-day cooling-off period after the life insurance policy is issued, and receive a refund of any premiums paid without needing to give a reason.

5. Don’t Rush

Insurance terms can sometimes be complex. If you do not fully understand the details, do not feel pressured to accept or rush into signing anything. The insurance intermediary has a responsibility to clearly explain the policy to you. If necessary, consider inviting a family member to attend the meeting with you. Also, never sign a blank or incomplete form, as this could lead to disputes or compromise your rights in the future.

Conclusion

Insurance is a commitment to yourself and your loved ones. Choosing the right product can provide true peace of mind. If you have any doubts during the application process, don’t hesitate to ask questions. Give yourself enough time to think things through and avoid making hasty decisions. We hope these tips help you better understand the insurance application process so that you can make informed choices and enjoy a secure, worry-free retirement.