How to compare VHIS?
Before comparing which VHIS plan is the best, you should bear in mind that all VHIS plans are “pure protection” and do not include any savings component.
Aspect 1: Choose the best VHIS based on your company's group medical insurance
If you have group medical insurance
A high-end VHIS is the best for you as these plans usually are full-covered with What is a Deductible in Insurance?. It could be an add-on coverage to your current group medical insurance. If the deductible of the plan is the same as your group medical insurance’s inpatient coverage, that would be the best!
Plans that offer full coverage are generally more expensive. But a deductible can help reduce premium expenses. Deductible is the amount you need to pay first before the insurance company pays you the reimbursement (so it is also known as an annual out-of-pocket expense).
After that, the insurance company will fully compensate for the remaining medical expenses*.
If you have group medical insurance, you can first apply for a claim from that plan and use the compensation there to offset the deductible. Then you can apply for compensation from high-end VHIS plans.This method of purchasing insurance can help you obtain maximum protection at a reasonable premium.
- *The insurance company will provide compensation based on the reasonable and customary necessary medical expenses according to the lifetime and annual benefit limits.
If you lose your group medical insurance when you retire, you can consider:
If you do not have group medical insurance
You can choose a Flexi plan with an annual benefit limit ranging from HK$600kto HK$1m, and you can directly apply for compensation from the insurance company for your hospitalization and treatment expenses.
Aspect 2: Choose the plan that fits your monthly budget and preferred room level
If you choose a high-end VHIS, you need to choose the ward level. These types of plans usually cover semi-private and private wards, with the former being cheaper than the latter. The difference in premium is up to 86%^.
The Standard and Flexi plans do not have restrictions on the room level, but even with SMM, the benefit limit is mostly limited to the cost of a “regular ward.” Only a few plans can cover the cost of a “semi-private ward,” (Bowtie VHIS Flexi Plus is one of them). The SMM in the plan can cover the cost of a “semi-private ward.”
- ^The above premium difference is based on a 30-year-old person purchasing Bowtie Pink with an HK$80,000 deductible.
Aspect 3: Choose the plan with the best coverage & benefit limit
Different Flexi plans (including high-end VHIS) have varying coverage and benefit limits. When comparing plans, the most important thing is to compare the “main coverage items and their benefit limits,” including:
- Lifetime benefit limit
- Only high-end VHIS have lifetime benefit limits, which can reach HK$50 million or more;
- Flexi plans do not have lifetime benefit limits.
- Annual benefit limit
- High-end VHIS have annual benefit limits ranging from HK$10 million and above.
- Flexi plans have annual coverage limits ranging from HK$600,000 to HK$1,000,000;
While Standard plans generally have similar coverage and do not have lifetime benefit limits, while the annual benefit limit is HK$420k.
These three coverage items are absolutely the most important in health insurance, as they are the main and most expensive expenses during hospitalization and treatment. Therefore, the higher the benefit limit for these items, the better, so that you can ensure maximum coverage for every treatment/surgery.
Customers who purchase high-end VHIS do not have to worry because all items are full-covered1.
Customers who purchase “standard plans” and “flexi plans” can choose a plan with the maximum coverage for surgeon, anesthesia, and operating theaters fees within their budget.
1 The insurance company will provide compensation based on medical necessity according to the lifetime and annual benefit limits.
SMM can compensate for the remaining medical expenses when qualified medical expenses exceed the benefit limit of each item.
For example, if Ms. Li needs to be hospitalized, the miscellaneous cost for treatment is HK$20,000, but the VHIS can only cover HK$18,000, SMM can cover the remaining 80% of the cost, which is HK$2,000.
Of course, “High-end VHIS” is a full-covered plan, so there is no need for SMM. Between Standard and Flexi plans, only the former provides SMM. Therefore, if you have budget, we suggest to purchase Flexi plan over Standard plan.
Bowtie VHIS Flexi Regular provides an annual benefit limit of HK$600,000 while the VHIS Flexi Plus offers HK$1m.
How much coverage do we need from VHIS?
According to internal data from Bowtie’s actuarial team^, over 95% of claims cases caused by accidents or illnesses involving semi-private rooms result in medical expenses of less than HK$40k, with only a few cases possibly exceeding HK$3m. Therefore, an annual benefit limit of HK$600k is sufficient in most cases.
If you purchase “high-end VHIS,” an annual benefit limit of HK$10m and a lifetime benefit limit of HK$50m are more than sufficient. You do not need to pay higher premiums for even higher coverage limits.
^The Bowtie team reviewed 3,800 high-end medical claims cases from 8,000 policies over a 45-month period and found that the average medical expenses of the top 5% of claims, which are the most expensive cases, were only about HK$317,000, while the average medical expenses of the top 0.5% of claims were about HK$2,286,000.
Aspect 4: Find the best plan based on the premium increase over the next 5/10 years
While coverage is important, the premium is equally important!
Even if you have the highest coverage in Hong Kong, if the premium keeps increasing, the financial burden will still be heavy. Moreover, not only the 1st year premium should not only be considered, but also the premium for at least 5 to 10 years.
The benefit of VHIS is that all plan premiums are easily visible on the website of the Health Bureau.
Aspect 5: Find the best VHIS based on the company’s operation and service
In addition to product design, the operational methods and services provided by insurance companies are equally important, as insurance is not a one-time purchase but a long-term protection.
In the future, if you need to purchase additional coverage, switch plans, or make claims, you will also need the support and arrangements of the insurance company. In Hong Kong, there are two main types of insurance companies, and their operational methods and services are very different:
- Virtual insurance companies
- Traditional insurance companies
The main differences between the two are:
| Virtual Insurance Companies | Traditional Insurance Companies | |
| Application Method | Online application, underwriting, claims | Through insurance brokers/agents (intermediaries) |
| Who provides the after-sales service ? | CS/ Claims team | Intermediaries |
| Commission | Zero commission | A proportion of the premiums |
| When can you apply/make claims? | Anytime | During intermediary’s working hours |
| Application Time | Within 10 minutes | 3 days to 3 weeks |
| Payment Mode | Monthly payment | Monthly/annual payment |
After understanding the main differences between the two, how will operational methods affect consumers?
In short, if you are an independent, impatient person who likes to invest at the lowest cost to get the maximum benefit, then virtual insurance companies (such as Bowtie) may be more suitable for you, while traditional insurance companies are more suitable for you if you are not the above mentioned person.
Many people think that virtual insurance companies have no service, but in fact, the “customer service department” also provides services such as application, underwriting, and claims, just like insurance intermediaries, but the difference is that the “customer service department” does not have a sales relationship with you.
