Life Insurance in H.K.

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Life Insurance in H.K.
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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
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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

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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),
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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"
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Statistic of individual life insurance policy in
Hong Kong from 2001 to 2005
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Statistic of Long-Term Insurance business of AIA
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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 ?

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• 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

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• 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

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• 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 )

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• 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 )

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

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Products of AIA

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

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

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

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

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Compare between term insurance
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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

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Compare between universal insurance
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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

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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

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Compare between whole life insurance
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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

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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

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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

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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

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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

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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

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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

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Conclusion

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

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

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

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