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Life Insurance in H.K.

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Title: Life Insurance in H.K.


1
Life Insurance in H.K.
2
History of insurance
Protecting against risk
Cases Over 5000 years ago, in China
(measures against piracy) 4,500 years ago, in
Rome (burial club) gt First record of life
insurance
3
What life insurance is?
  • make sure someone they love who are financially
    taken care of
  • Life insurance is not gambling even though it
    has the similarities of probability and odds
  • Life insurance is different from the other
    types of insurance


4
Background of AIA
AIA established since 1931
one of the largest life insurers in Southeast
Asia
offers a comprehensive product line, e.g. life
and medical , accident and health insurance
wholly-owned subsidiary of American
International Group, Inc. (AIG),
5
AIA corporate vision
AIA Your 1st Choice in LIFE, The Insurance
Company distinguished by leadership in Care,
Trust and Professionalism.
Service objective of AIA
"Customer Comes First"
6
Statistic of individual life insurance policy in
Hong Kong from 2001 to 2005
7
Statistic of Long-Term Insurance business of AIA
8
Type of life assurance
  • Term Life
  • pays a lump sum only upon the policyholder's
    death
  • does not provide dividends
  • connect with a mortgage,
  • but protection benefits ? amount of the loan ?

9
  • Whole Life
  • provide a cash value for the policyholder during
    his lifetime
  • provide a lump sum plus dividends to the
    policyholder's beneficiary upon his death
  • Endowment
  • pays out a lump sum upon reaching an agreed date
  • pays a death benefit before the agreed date is
    reached
  • savings and protection function

10
  • A Choice of Savings Type
  • part of the premium is used for investment
    purposes fall into two groups
  • offering guaranteed returns
  • offering returns which directly reflect the
    performance of the stock market

11
  • Dread Disease
  • offer a lump sum in the event that person
    insured contracts a critical illness
  • also provide benefits in the event of death
  • (providing a payment in lieu of a
    critical illness for which a policyholder has not
    previously claimed )

12
  • Income Replacement Plans
  • offer a percentage amount of the insured's salary
    to replace his income
  • ( ill and cannot work for a prolonged
    period of time )
  • hospital income plans (a fixed cash sum for
    each day spent in hospital )

13
  • Disablement Policies
  • offer a lump sum in the event that the insured is
    permanently disabled due to an accident

14
Products of AIA
  • Whole life insurance
  • non-guaranteed annual dividends.
  • Death Benefit
  • a medical check-up every 2 years
  • If totally and permanently disabled

15
  • Investment linked
  • death benefits
  • flexible investment savings scheme
  • Policy fee refund
  • A comprehensive range of fund

16
  • Universal Life
  • death benefit
  • Guaranteed minimum interest-crediting rate
  • higher savings and greater flexibility

17
  • Term life
  • Death benefits
  • unchanged premium with each 20 year period
  • emergency cash
  • no saving elements

18
Compare between term insurance
19
Compare between term insurance
  • AIA
  • Premiums are guaranteed to remain unchanged
    within each 20-year period
  • Unemployment Benefit
  • grace period to 365 days
  • Terminal Illness Advance Payment Benefit
  • Manulife
  • Premiums are guaranteed to remain unchanged
    within each 10-years period
  • No unemployment benefit
  • No grace period
  • No terminal illness advance payment benefit
  • Wont increase premium for changing occupation
  • Convert to any term policy

20
Compare between universal insurance
21
Compare between universal insurance
  • AIA
  • Lifetime protection
  • Flexible premium payments
  • death benefit
  • increase or decrease coverage
  • Guaranteed minimum interest-crediting rate
  • guaranteed issue
  • guarantee the rate would never be negative
  • Manulife
  • Lifetime protection
  • Flexible premium payments
  • death benefit
  • increase or decrease coverage
  • Guaranteed minimum interest-crediting rate
  • No guaranteed issue
  • No guarantee the rate would never be negative

22
Compare between whole life insurance
  • AIA
  • Can withdraw cash anytime
  • Guarantee Minimum interest crediting rate
  • After the plan matured? life- long income
  • More than 70 portfolio can be choose
  • Freedom to choose the amount of premium and
    duration
  • Manulife
  • Can withdraw cash anytime
  • Not Guarantee
  • After the plan matured? life long income
  • More than 40 portfolio can be choose
  • Freedom to choose the amount of premium and
    duration

23
Compare between whole life insurance
24
Compare between whole life insurance
  • Manulife
  • Guaranteed cash value or non- guaranteed dividend
    accumulation
  • No medical check up except WEALTH MAX plan
  • Death Benefit
  • the Insured becomes totally and permanently
    disabled before the age of 60 during the premium
    payment period, premium will be waived
  • AIA
  • Guaranteed cash value or non- guaranteed dividend
    accumulation
  • medical check-up2 every 2 years
  • Death Benefit
  • the Insured becomes totally and permanently
    disabled before the age of 60 during the premium
    payment period, premium will be waived3

25
Compare between whole life insurance
  • AIA
  • A full range of optional riders on accident,
    medical, critical illness and disability
  • grace period to 365 days
  • Unemployment Benefit
  • Manulife
  • Addition payment for supplementary benefits
  • 2 years grace period
  • Unemployment Benefit

26
Trend/development of life insurance in HK
  • Life insurance in Hong Kong
  • Trend Individual Life business ?most dominant
    line of insurance business
  • Analyze by different methods

27
Number of policies(???? )
  • Measurement whole life term life
    endowment(saving) others
  • 2004 6,049,940
  • 2005 6,587,525
  • Increased 8.8
  • Predict increase about 9 in 2006

28
Office Premiums(???? )
  • Measurement whole life term life
    endowment(saving) others
  • 2004 82,227.4
  • 2005 98,181.2
  • Increased by 19.4
  • Trend increase about 20 in 2006

29
Sum assured(??)
  • Measurement whole life term life
    endowment(saving) others
  • 2004 2,007,051.3
  • 2005 2,118,108.2
  • Increased by 5.5
  • Trend increase about 6 in 2006

30
Number of insurance agents
  • 2002 41,910 peoples
  • 2003 43,503 peoples
  • 2004 43,690 peoples
  • 2005 46,060 peoples
  • Steadily increase
  • Increase in 2006

31
Conclusion
  • What life insurance is and the background of our
    target company AIA.
  • Type of life assurance
  • - term life
  • - whole life
  • - endowment

32
  • Type of product in AIA
  • - Saving Insurances
  • - Investment linked
  • - Universal life
  • - Term life

33
  • Compare Between American International Assurance
    (AIA)
  • - term life insurance
  • - universal life insurance
  • - whole life insurance

34
  • Trend of buying insurance in Hong Kong
  • - number of policies
  • - office premiums
  • - sum assured
  • - number of insurance agents
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