# Hong Kong Insurance Product Types Compared

> English summary of how eight Hong Kong product types differ in guaranteed and non-guaranteed components, liquidity, main risks, tax deductions and governing rules.

- URL: https://gangxian.hk/en/compare/
- Author: Gangxian Guide Editorial (https://gangxian.hk/about/)
- Reviewed by: Gangxian Guide Editorial Editorial Board
- Published: 2026-11-04
- Updated: 2026-11-04
- Language: en

## Key takeaways

- The useful comparison is not returns but who bears which risk: protection products are judged on claim conditions, savings products on guaranteed values and fulfillment ratios.
- Only VHIS certified plans (HK$8,000 per insured person) and QDAP (HK$60,000 with MPF voluntary contributions, per taxpayer) carry Hong Kong tax deductions.
- All long term policies share the 21-calendar-day cooling-off period, the financial needs analysis and, for Mainland ID holders, the IFS-MP.

## How to read the table

The table compares structures and rules, not insurers, products or illustrated returns. "Guaranteed" means contractual; "non-guaranteed" means dependent on the insurer's declared dividends or crediting rates or on fund performance. "Liquidity" describes what a surrender returns in the early years. "Holding period" is a structural description, not advice.

## Eight product types, seven dimensions

| Dimension | Term life | Critical illness | Medical / VHIS | Accident | Participating whole life / savings | Annuity / QDAP | Universal life | ILAS |
|---|---|---|---|---|---|---|---|---|
| Problem solved | Death cover for a fixed term | Lump sum on diagnosis | Hospital and surgical costs | Accidental death, disability, medical | Long-term savings plus lifelong cover | Retirement income | Flexible-premium lifelong cover with an account | Investment account with basic cover |
| Guaranteed | Sum assured | Sum assured (savings type also guaranteed cash value) | Benefits per terms | Sum assured | Guaranteed cash value and death benefit | Guaranteed annuity amount | Minimum crediting rate, maximum charges | Usually none |
| Non-guaranteed | None | Dividends (savings type) | None (premiums adjustable) | None | Reversionary and terminal bonuses | Dividends | Crediting above the minimum | Fund performance |
| Early liquidity | None | Low | None | None | Well below premiums paid | Loss if surrendered in deferral | Account less surrender charge | Account less charges, high early fees |
| Main risk | Cover ends, renewal cost | Definitions, disclosure, waiting period | Premium inflation, exclusions | Exclusions | Early surrender loss, dividends below illustration, FX | Deferral surrender loss, inflation | Account hits zero, charges rise | Market volatility, fee layers |
| Hong Kong tax deduction | None | None | VHIS certified plans: HK$8,000 per insured person per year | None | None | QDAP: HK$60,000 per taxpayer with MPF TVC | None | None |
| Governing rules | Conduct code, GL30 | GL16 (savings type), GL30 | VHIS rules | General business rules | GL16, fulfillment ratio notes | GL16, GL19 | GL16 | GL15, GL26, SFC authorization |

## What the rules add

Every long term policy carries the 21-calendar-day cooling-off period under GL29 and requires a financial needs analysis under GL30; Mainland ID card holders sign the IFS-MP. Investment-linked schemes add the IFS-ILAS; premium financing adds the IFS-PF and affordability and over-leveraging assessments; replacing an existing life policy requires the industry's Customer Protection Declaration. Tax deductions exist for only two product types and are useful only to people with Hong Kong taxable income.

## Who bears the investment risk

Ranked from insurer to policyholder: participating policies and annuities share results through non-guaranteed dividends with a guaranteed floor; universal life credits an insurer-declared rate with a guaranteed minimum but charges can rise; ILAS passes fund performance straight through with no guarantee. Protection products carry no investment risk; their risk is whether the claim conditions are met. Liquidity follows the same order: savings products should be funded only with money that will not be needed before the guaranteed break-even year shown in the illustration.

## Sources and dates

- GL16 Guideline on Underwriting Long Term Insurance Business (Other than Class C Business), 2026 revision — Insurance Authority (IA) 2026-02-06 https://www.ia.org.hk/en/legislative_framework/circulars/reg_matters/files/GL16_2026_EN.pdf
- GL29 Guideline on Cooling-off Period — Insurance Authority (IA) 2019-09-23 https://www.ia.org.hk/en/legislative_framework/files/GL29.pdf
- GL19 Guideline on Qualifying Deferred Annuity Policy — Insurance Authority (IA) 2019-04-01 https://www.ia.org.hk/en/legislative_framework/files/GL19.pdf
- FAQ on Tax Deduction for Qualifying Premiums Paid under the VHIS Policy — Inland Revenue Department (IRD) 2026-11-04 (accessed) https://www.ird.gov.hk/eng/faq/vhis_qp.htm

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