Personal Accident and Sickness Insurance 人身意外及疾病保險
PA insurance requires bodily injury that meets the policy's accident definition. Its three main benefits are a capital payment for accidental death or specified injuries, weekly benefits for temporary total or partial disablement, and reimbursement of injury-related medical expenses subject to a limit per event. Capital benefits are usually percentages of the Principal Sum Insured: death, loss of two limbs, total loss of sight and qualifying total permanent disablement normally attract 100%, while lesser permanent injuries attract lower percentages. Weekly benefits are usually paid monthly for a maximum period, such as 104 weeks; this is an example, not a universal policy period.
Temporary total or partial disablement depends on the policy's occupation test and the insured's actual ability to perform duties. The test usually concerns the usual occupation, although some policies use any occupation; a medical certificate granting sick leave does not necessarily establish total disablement. Some injury definitions require external, violent and visible means, while wider wording may include accidental food or gas poisoning. A typical permanent disablement definition requires at least 12 months with no reasonable prospect of improvement. Separately, death or disablement usually must occur within 12 months of injury, or another period specified in the policy.
Several insured outcomes from one accident normally produce only the largest benefit, with an exception for weekly benefits followed by death. A paid claim generally reduces the remaining sum insured for that policy period. Exhaustion ends the policy without a premium refund, although individual benefits may still be calculated using the original sum if the wording provides for this. Common exclusions concern war, nuclear risks, specified hazardous activities, suicide, intentional self-injury, alcohol or drug abuse, pregnancy and pre-existing conditions. Properly prescribed medication is distinguished from drug abuse.
Standard PA premium calculations are based on occupation, commonly divided into four risk classes; rates for men and women are equal if other factors are equal. A typical occupation-change clause requires immediate written notice and allows the insurer to adjust premiums, benefits or other terms. Age can also affect underwriting and eligibility. Where sickness cover is included, it provides benefits only for temporary total or partial disablement caused by sickness, not death from sickness; female sickness premiums are normally higher. Hong Kong PA policies are unlikely to include sickness cover. Policies normally last one year, with renewal by mutual agreement. [IA General Insurance Study Notes, 2022 edition, Health Insurance](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf)
Medical Insurance 醫療保險
Medical insurance primarily covers medical expenses arising from accident or sickness, giving it a different scope from PA medical expense cover for accidental injury alone. Distinguish two hospital benefits: indemnity cover reimburses eligible actual expenses subject to policy limits and conditions, while hospital cash cover pays a stated amount for each inpatient day rather than calculating payment from the medical bill.
Common exclusions in ordinary medical policies include congenital conditions, pre-existing conditions, birth control or infertility treatment, cosmetic surgery, routine examinations and dental treatment. Dental treatment generally has an exception for accidents during the policy period. Most usual PA exclusions also apply. A pre-existing condition must be assessed against the relevant wording: diagnosis after inception does not establish that the condition began after inception if it already existed or produced symptoms before cover started.
Medical policies are usually annual, and renewal premiums may benefit from a grace period. Some plans give the insured the option to renew, requiring the insurer to accept a renewal request that meets the terms; guaranteed renewal should not be assumed for every medical policy. Cancellation rights also depend on the wording: most policies allow cancellation by the insured, but the insurer does not necessarily have the same right.
Occupation, age and health are important rating factors, alongside sex, benefit levels and geographical limits. Medical insurance may cover a group or a family. Some products include maternity or dental expenses as standard or additional benefits, so a common exclusion is not a universal exclusion across all products. [IA General Insurance Study Notes, 2022 edition, Medical Insurance](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf)
Voluntary Health Insurance Scheme (“VHIS”) 自願醫保計劃（「自願醫保」）
Fully launched on 1 April 2019, VHIS is a government scheme regulating individual indemnity hospital insurance, with voluntary participation by insurers and consumers. Insurers must register as VHIS Providers and obtain certification for each product before marketing it as a Certified Plan. Standard Plans must include Basic Benefits without Enhanced Benefits. Flexi Plans must include both, generally preserving basic protection under the better-off principle, subject to specified exceptions. Either may include a minor element of Other Benefits. Employee group master policies, outpatient plans, hospital cash, critical illness cash and illness-specific indemnity plans do not qualify. Other insurance attached to the same policy does not thereby become part of the Certified Plan.
Entry is for Hong Kong residents, including Hong Kong Identity Card holders, aged from 15 days to 80 years. Providers may underwrite applications and accept them unconditionally, impose premium loading and/or case-based exclusions, or reject them. They must explain their decisions and provide written explanations on request. Once accepted, renewal is guaranteed up to age 100; Standard Plans and the Basic Benefits of Flexi Plans have no lifetime benefit limit. Guaranteed renewal does not fix premiums: providers must publish age-banded standard premium schedules and may adjust standard premiums across the overall portfolio, but subsequent changes in the insured's health cannot trigger additional individual premium loading or case-based exclusions.
Under the arrangements described in the notes, unknown pre-existing conditions receive no reimbursement in the first policy year, 25% in the second and 50% in the third, with full cover from the fourth, subject to the other coverage conditions. Investigation and treatment of congenital conditions manifesting or diagnosed after age 8 follow the same reimbursement arrangement. Cover also includes day case procedures subject to medical necessity and other conditions, prescribed non-surgical cancer treatments, and specialist-recommended psychiatric treatment during hospital confinement in Hong Kong. Prescribed CT, MRI and PET scans outside hospital carry 30% coinsurance. Standard Plan benefits apply worldwide except psychiatric treatment, without restrictions on healthcare providers or ward class.
Qualifying premiums paid on or after 1 April 2019 may be deducted under salaries tax or personal assessment for the taxpayer or specified relatives: a spouse, children, and the taxpayer's or spouse's grandparents, parents and siblings. The annual deduction ceiling is HK$8,000 per insured person regardless of policy count, with no cap on the number of eligible specified relatives. Separately, the cooling-off period is 21 days or a longer period offered by the provider, starting from the earlier of policy delivery to the policyholder or representative and issuance of the policy availability notice to either. Cancellation of the new policy brings a full premium refund if no benefit payment has been made, is due or is impending. [IA General Insurance Study Notes, 2022 edition, VHIS](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf)
Guideline on Medical Insurance Business (GL31) 醫療保險業務指引（指引 31）
Issued by the IA, GL31 centres on fair treatment of customers. It applies to authorized insurers underwriting medical insurance business and licensed insurance intermediaries carrying on regulated activities concerning that business. Its scope includes individual and group medical insurance, VHIS Certified Plans and other medical insurance business; the standards are not confined to VHIS products.
Fair treatment runs through product design, the periods before and after sale, and performance of policy obligations. Products and sales should address customers' interests and needs, information should be accurate, clear and not misleading, advice should meet professional standards, and unsuitable sales should be minimised. Claims, complaints and disputes should be handled fairly and promptly, and customer information should remain protected. Good faith and avoidance of abusive practices also form part of fair treatment.
GL31 is not subsidiary legislation, has no force of law and cannot override legislation. Non-compliance alone does not make an insurer or intermediary liable to judicial or other proceedings. It may nevertheless affect the IA's assessment of relevant persons' continuing fitness and properness and inform its consideration of whether conduct may prejudice existing or potential policyholders. The IA considers the full context, facts and impact. [IA Guideline on Medical Insurance Business, GL31](https://www.ia.org.hk/english/legislative_framework/files/GL31_20191129e.pdf)
Before launch, insurers should review a product against their business model, applicable laws and rules, and risk management approach. They should identify target customers' needs, price reasonably with regard to sustainability and select suitable distribution channels. After launch, insurers, licensed insurance agencies and licensed insurance broker companies should monitor sales processes and take appropriate remedial action where requirements are not met.
Practice
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