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Hong Kong: Insurance for Expats
Generally speaking, expatriate life in Hong Kong is a very rewarding experience. Unfortunately, this does not mean that it will always be free of trouble. Minor issues such as seeing a doctor or accidentally damaging another car can become rather expensive if you do not have the right type of Hong Kong insurance. Therefore you should think about different sorts of Hong Kong insurance before you actually need them.
Before getting any Hong Kong insurance, though, check with your previous provider if it is possible to transfer your policy abroad. There are also a growing number of international insurance plans with worldwide coverage. Otherwise, you will have to look into getting additional insurance. As the Hong Kong insurance market is very competitive, it is useful to shop around for a bit.
There are only two mandatory types of Hong Kong insurance. Additionally, you can get a sheer endless amount of extra policies, covering everything from your pet’s vet bills to weddings or dental care.
If you are looking for specific information on medical insurance, please read on in our article on Hong Kong health insurance. For a short preliminary visit, travel insurance is usually enough.
Hong Kong Insurance: Retirement Funds
Until recently, there was no government-supported pension fund. Only about one third of the working population had some form of retirement provision. It mainly consisted of statutory pensions for civil servants and retirement schemes set up voluntarily by employers.
Today, government policies have caught up with the reality of a quickly aging population and the growing life expectancy: The government has been establishing a three-pillar system to extend retirement provisions to larger parts of the population. The three pillars of this Hong Kong insurance policy for future pensions are:
- a basic social safety net financed by taxes
- a mandatory, privately managed contribution scheme
- voluntary personal savings and insurance
The second pillar has been realized in form of the so-called Mandatory Provident Fund Scheme (MPF), launched in December 2000. If employers established retirement schemes before the introduction of the Mandatory Provident Fund, these older funds often continue to operate under the Occupational Retirement Schemes Ordinance (ORSO). Employees can choose whether they would like to join the ORSO scheme or an MPF scheme.
Contributions to such mandatory retirement funds can be deducted from your Hong Kong income tax. Moreover, expats who have paid into this Hong Kong insurance scheme via their company’s MPF usually withdraw their money when leaving the city. (The basic social safety net also depends on residence before retirement, and it’s both income-tested and asset-tested.) Thus you cannot rely on the official Hong Kong insurance program to provide for your own old-age pension. Talk to your social security office and/or financial service provider before you move.
Hong Kong Insurance: Other Work-Related Policies
Unemployment benefits through the Comprehensive Social Security Assistance Scheme are fairly hard to come by. There are strict residential restrictions for unemployment benefits, which frequently do not apply to expats. Furthermore, this type of Hong Kong insurance is currently only able to assist a certain percentage of the unemployed population. Applicants are therefore screened on income as well as assets. It is strongly advised to provide for yourself and your family for the case of unemployment.
All employers need to have valid special Hong Kong insurance policies so they can compensate their employees for any personal injuries or accidents occurring at work. Further sorts of Hong Kong insurance cover other aspects of daily life; most of them are purely voluntary, and you can take them out on an individual basis. We will introduce the most common ones in the second part of our guide to Hong Kong insurance.
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.