How individual insurance differs from company insurance

When people fall sick, they usually turn to their personal health insurance or company health medical insurance for financial support to pay for their treatment. In recent years, voluntary health insurance is becoming increasingly popular, why is this so? With a limited budget, what are the differences between voluntary health insurance and traditional individual health insurance? How should we choose between these two insurances?

What is the Voluntary Health Insurance Scheme (VHIS)?

The VHIS was launched by the Food and Health Bureau of the Hong Kong government on April 1, 2019. Insurance policies approved by the bureau must comply with the frameworks and regulations and provide hospitalisation coverage and personal medical reimbursement. its established framework and regulations. This product is meant to enhance the level of protection offered by medical insurance products, allowing citizens to choose private medical services with insurance coverage, which can eventually help to ease the pressure on public hospitals in the long term.

The VHIS is divided into two types of plans, "Standard Plan" and "Flexi Plan". The Standard Plan will need to meet the minimum requirements and provide basic coverage. While the Flexi Plan covers additional protections, such as higher limits, to provide people with more comprehensive coverage.

Compared to traditional individual medical insurance, some of the benefits in the VHIS recognized products, for both "Standard Plan" and "Flexi Plan," are particularly noteworthy.

The differences between VHIS voluntary health insurance and traditional personal health insurance are:

1. You can apply for tax deduction for premiums:

Applying for VHIS allows you to apply for tax deduction. This means that taxpayers who apply for VHIS before 31 March can apply for tax deduction for the premiums paid for themselves and/or their specified relatives.

2. Guaranteed renewal until the insured is 100 years old:

After the VHIS voluntary health insurance policy takes effect, the insurance is guaranteed to be renewed until the age of 100, regardless of any changes in the health status of the insured.

3. The VHIS standard plan does not set a lifetime benefit limit:

The VHIS standard plan does not set a "lifetime insurance limit” but has an "annual insurance limit". This means that no matter whether there is a claim, or if the claim exceeds the annual insurance limit in the policy year, in the next policy year the benefit limit will be recalculated and will not be affected by previous claims. On the other hand, the flexible plan depends on individual product design.

4. Unknown pre-existing conditions at the time of policy application

The VHIS voluntary health insurance covers pre-existing diseases that are unknown at the time of insurance application.

Why do I need to purchase additional voluntary health insurance when I already have company health insurance?

Many people think they do not need to purchase additional personal medical insurance for themselves as they are already covered by their company’s medical insurance. However, this is the protection gap that many have overlooked.

• Coverage limit:

For common colds and flu, you will likely head to the clinic to see a doctor. In this case, it would be okay to be reimbursed by the company’s medical insurance. However, most companies’ medical insurance may only provide outpatient, life, and hospitalization coverage. You are unlikely to be able to claim for items such as psychiatric treatment. Furthermore, the company's medical insurance may not be able to fully cover medical expenses for surgery or diseases. Therefore, purchasing voluntary health insurance while being covered by the company’s medical insurance can help reduce the protection gap.

• Guarantee period:

Most salary workers will experience job changes. From resignation to joining a new company, and even during the probationary period, they may not be able to enjoy their company’s group medical insurance benefits. This period when one is not covered could last for half a year each time they change jobs. Additionally, when one reaches retirement age, it is likely that the company's medical insurance will no longer provide coverage for these employees. Having personal medical insurance will help to maintain protection according to the renewal period of different products. Among these products, the voluntary medical insurance will guarantee renewal until the age of 100, so you will not lose your medical insurance coverage due to work restrictions.