FAQS

What is life insurance policy replacement?

Life insurance policy replacement means you are using/ intend to use the funds from the following transactions, which happened or will be happened during 12 months immediately prior to/ following the application date* of the new life insurance policy, to fund the purchase of the new life insurance policy :

  1. some or all of the funds arising from the existing life insurance policy, including but not limited to:
    • surrender / partially surrender to obtain its surrender value
    • taking out a policy loan (including automatic premium loan or collateral assignment)
    • withdrawing policy values (e.g. cash out dividends or redeem fund units etc.)
    • reduced paid up insurance
  2. any saving made by reducing the premium payable under the existing life insurance policy, including but not limited to:
    • lapsation (e.g. by non-payment of premium)
    • exercising the right to a premium holiday under your existing life insurance policy

* Application date is the date on which the application form of the new life insurance policy is signed by you.

What kind of transactions would not be considered as life insurance policy replacement?
  1. where the new life insurance policy is being effected solely by reason of the existing life insurance policy being converted into the new life insurance policy under the provisions of the existing life insurance policy;
  2. where the existing life insurance policy and the new life insurance policy are with the same authorized insurer and the new life insurance policy is being effected solely by reason of the existing life insurance policy being converted or migrated into the new life insurance policy under a conversion or migration program offered by the insurer, in which re-underwriting is not required;
  3. where the only change made to the existing life insurance policy, relates to the coverage under a rider on the existing life insurance policy and no change is made to the life coverage of the basic plan of such policy; and
  4. where the life insurance policy is purchased in place of an existing life insurance policy cancelled during its cooling-off period.
What is the implications and risks involved in life insurance policy replacement?

You may suffer actual and potential losses in case of policy replacement. To protect your interest, you should carefully compare your existing and the new life insurance policies, and assess below aspects to see whether the policy replacement is of your best interests before making a decision:

Financial Implications

Insurability Implications

Claims Eligibility Implications

If you decided or considering to replace your life insurance policy with a new life insurance policy，you should:

If you decided or considering to replace your life insurance policy with a new life insurance policy, you should:

  1. Answer the question stated in “Replacement Declaration” carefully. If you are uncertain about the definition of policy replacement, please approach your licensed insurance intermediary and / or insurer of your existing life insurance policy to obtain further information;
  2. If your answer in “Replacement Declaration” is “Yes” or “Not yet decided”, your licensed insurance intermediary must explain the “Important Facts Statement - Policy Replacement” (“IFS-PR") to you. You should read all items in the IFS-PR carefully and check that licensed insurance intermediary has explained the information on the IFS-PR and you understand the content of IFS-PR before you sign it;
  3. If you do not understand any of the information in IFS-PR or the advice or information provided to you by your licensed insurance intermediary is different from the information in the IFS-PR, please do not sign this IFS-PR and do not proceed with replacing your existing Life Policy;
  4. If you have question about policy replacement, please visit the Insurance Authority's website at www.ia.org.hk.
I signed the application form of the new life insurance policy on 23 Sep 2020 and I had/will have different arrangements for my existing life insurance policies, which one is relating to policy replacement?
Policy arrangement Consider as policy replacement?
1 Reduced the sum assured of the existing life insurance policy on 23 Oct 2019 Yes.
Reduced sum assured of the existing life insurance policy in the past 12 months of the application of the new life insurance policy.
2 Intend to allow the existing life insurance policy generating automatic premium loan by suspending the premium payment starting from the next premium due date on 30 Sep 2020. Yes.
Automatic premium loan is also considered as policy loan and it is about to take place in the next 12 months upon the application of the new life insurance policy.
3 Withdrew cash coupons from the existing life insurance policy on 12 May 2020 Yes.
Cash coupons is considered as a part of policy value and the withdrawal took place in the past 12 months of the application of the new life insurance policy.
4 Intend to suspend the premium payment of the existing term life insurance policy (no saving element) in the next premium due date on 20 Sep 2021. Yes.
Term life insurance plan does not have any saving element. Hence, the existing term life insurance policy will be lapsed in the next 12 months upon the application of the new life insurance policy after suspend the premium payment.
5 The existing life insurance policy has been under a premium holiday since 1 Jan 2018. No.
The existing life insurance is not exercising premium holiday during 12 months immediately prior to the application of the new life insurance policy.
6 Cancelled the medical rider of the existing life insurance policy on 23 Sept 2020. No.
The only change relates to the coverage under a rider on the existing life insurance policy and no change is made to the life coverage of the basic plan of such policy.