14Jul

The Importance of Critical Illness Protection

We never know when the worse can happen. One day we could be living normal loves when suddenly we’re told that we have a critical illness that can possibly take us away from the people we love.

Critical illness insurance is designed to protect you and your family from the impact of illnesses such as cancer, heart attack and stroke, and provide financial security in the face of a crisis. It gives you financial independence when you need it most. You need insurance not only because you are going to die but because you are going to live.

In the Middle East, the average age is 48 for critical illness claimants. One can even get a heart attack as early as 29.

These testimonial from Gary, an expat and insurance claimant is a story of strength and resilience we can all learn from:

PRIVATE MEDICAL INSURANCE VS. CRITICAL ILLNESS COVER

It is not unusual for people to be confused between critical illness cover and private medical insurance (PMI). While PMI might cover some or all of your medical bills, there tends to be an annual limit and you might also be required to co-pay a percentage of the bills. But it’s not just about the medical bills.

Reduced income

You may have to reduce your working hours, or stop working, which would result in a loss of income. In a report by Macmillian4 , almost one in three (30%) people living with critical illness experienced a loss of income as a result of their diagnosis. A third of critical illness survivors (33%) stopped working either permanently or temporarily, depending on recovery times.

Hidden healthcare costs

A significant proportion (41%) of people living with critical illness incur costs for other healthcare needs. These range from prescription medicines not included in personal medical insurance, clinical psychological services, physiotherapy, speech and language therapy, occupational therapy and dietetics.

Lifestyle costs

Over a third (37%) of people incur costs for replacement clothing due to rapid weight loss or gain, specialised equipment, and home modifications, such as wheel chair access.

Other costs

Some costs are difficult to quantify, such as regular trips to medical appointments, travel for specialised treatment, wigs or hairpieces due to hair loss, and increase in household bills such as utilities, groceries and telephone

24Jun

Inheritance Tax for Expats

Did you know that your beneficiaries may be charged a large amount Inheritance Tax (IHT) bill in case of death. The cost of IHT is almost as equally large as the amount being left. In 2012 to 2013, over £4 billion in inheritance tax was paid to the UK government including sums paid by expats from Hong Kong.

WHO WILL PAY FOR INHERITANCE TAX?

IHT liability is based on one’s permanent residence or domicile. There are two types of domicile: domicile of origin and domicile of choice.

A domicile of choice can be established if you can demonstrate that you have severed all connections with your “homeland” and established permanent ties elsewhere.

A domicile of origin may be challenge to change. Note that if you transfer one more time your domicile of origin will revive until you establish a new one. If you are domiciled in the United Kingdom, IHT applies to your global assets.If you are domiciled elsewhere, IHT is charged on your assets held in the UK.

IHT is charged through three main channels:

  • On your estate in the event of your death
  • On any gifts you present to individuals in the last 7 years of your lifetime
  • On any gifts to the most common type of Trust that you make through your lifetime

Everyone is entitled to make a certain proportion of gifts sans taxation and this is called the “nil-rate band”. Current cost is £325,000 which will remain so unti 2021. All excess above this band is charged at 40%.

Generally, property owners automatically follows the IHT net even before taking into account the total value of their investments. But note that it’s possible to reduce your exposure to this punitive tax.

Inheritance Tax is often treated as a “voluntary” tax because its impact may be mitigated. If you have large amounts of assets but don’t want to leave control over these or make gifts, you can still lower the cost of IHT by carefully planning your will.

LEAVING A WILL

Ensuring one has a will in place is a way to protect your loved ones from incurring impossibly high cost of IHT in the case where substantial assets are involved. For instance, a married couple and civil partners can do what the industry calls a “double up” on their nil rates and this implies that up to £650,000 can automatically pass free of IHT. One common myth about leaving your assets to your spouse or civil partner is that they get half if you die. This is not a fact.

Also, it is crucial to remember that minors cannot inherit money or property which means you need to assign someone to make the arrangements until they turn 18.The courts may choose this person for you if you fail to do so in your will.

Expats often have assets in parts of the world and all these have to go through the courts of the different jurisdictions. Delays can happen if one does not make the necessary arrangements in their will. There are also insurance that covers the cost of inheritance tax. Ask us about it. We help expats in Hong Kong.

30May

Expat Guide: Why You Need International Health Insurance

Hong Kong’s medical facilities and inpatient services is one of the best in the world. It is also one of the reasons why it is considered an expat hub in Asia. As a foreigner in a top global city, should you consider international health insurance?

The simple answer is YES.

SPEND LESS ON PRIVATE FOR HOSPITAL CARE

International private health insurance covers a bulk of the expense should one choose to go to a private hospital. Without a Hong Kong ID card, public health care could be a challenge especially for fatal injuries or chronic illness. Although public hospitals and their doctors are world-class in Hong Kong, immediate and consistent attention to your needs as a patient is better guaranteed with private health insurance.

COMPLIMENT YOUR MOBILITY

Expats often find themselves traveling to other countries on top of the new country they have chosen to reside. International health insurance follows you wherever you are and it till give you peace of mind in situations where local hospital may be unable to provide for your needs. The advantage of having this type of insurance is also having glocal service from your provider’s customer support so you know exactly what your policy can cover.

EMERGENCY EVACUATION

This is one of the best features of international health insurance. For expats who live in high-risk areas or live active lifestyles that may hold more risks than usual, getting covered for emergency evacuation could be what separates you from life or death. Repatriation cover allows expats to be flown back to their home country if necessary.

SUPPLEMENT FOR YOUR COMPANY-PROVIDED INSURANCE

Check if the company health insurance covers for family members or for chronic diseases. If you have special medical needs and your company insurance does not cater to its treatment, an international health insurance cover should be able to take care of what’s lacking.

OTHER HEALTH COVER

This health insurance policy is generally comprehensive and can cover maternity and cancer treatment. It all depends on your needs as well as your family’s. Village Insurance Direct helps expat find the affordable and complete international health insurance from established providers in Hong Kong.

 

11May

Expat Guide: Expecting a Baby in Hong Kong

Hong Kong hospitals are one of the best in Asia and the world. Public health hospitals have a fantastic reputation for being clean and safe but not as comfortable at times with long queues.

Expats with valid HK ID cards can easily seek medical attention at a minimum cost from public heath care facilities. The bed fee and ultrasound which cost $100 per day and $300 per copy, respectively are the more common expenses you’ll pay for when in a public hospital. However, we cannot always anticipate other risks during pregnancy and this is why choosing a private hospital remains the best option to keep the mother and the baby safe.

The Consumer Council has shared that there are plenty of options for private maternity packages that compete on the size of the private suite and the range and grade of the facilities provided. These sets of medical procedures are generally priced equally for residents and non-residents but that may not always be the case.

One has to consider the doctor’s fee, obstetrician and anesthetist. These are generally separate from the maternity package. It’s crucial that you ask for an itemized rundown of the specific services that are included in your health insurance policy once you choose to be treated in a private hospital.

Private health care is understandably more expensive but given the right health insurance cover; expats can fully take advantage of the best facilities and doctors around.  Some health insurance policies can cover the entire cost of maternity care.

Cost of Maternity Procedures in Hong Kong

cost_of_maternity_hong_kong

The costs mentioned do not take account the months that lead up to the birth including gynecological visits, ultrasounds and other tests.

The complete cost of delivering at one of Hong Kong’s private hospitals could sum up to more or less o$100K but this amount provides luxuries that won’t be available in public facilities. Most private hospitals also require that you put down a deposit, ranging from $10,000 to $20,000.

One highly recommended private hospital with a relatively cheaper maternity package ranges between $17,000 for residents and $35,000 for non-residents. This fee is for natural delivery in a Standard Room with 3-6 beds.

Other special fees include paying for a pediatrician to be in attendance during delivery (not optional) and a 30% surcharge for each additional baby in cases of twins or more.

Emergency C-Section with 5 nights can cost up to $51,000 for a standard room with 4 beds and around $97,000 for a private room. More complications can cost up to $150,000

Choosing a Health Insurance Cover

Pregnancy is considered a pre-existing condition and most insurance providers will not accept your application if you are already pregnant. Unless you are joining a group plan, some may waive or shorten the waiting period (ask when “waiting period” begins as it may vary per provider). Most insurers will not cover women after the age of 44 so that also plays into your application.

An annual fee of  $8,200 for health insurance with maternity cover can have a $20,000 limit on maternity cover. There are also policies with $10,200 annual fee with $10,000 maternity cover. Some insurance providers also provide newborn cover while some keep that policy separate.

This is where having a reliable insurance broker is important.  Details on uncommon risks like congenital diseases and newborn care need to adhere to what you specifically need and one might not immediately foresee these things without professional assistance.

Village Insurance finds the best cover for you depending on your condition and budget. Get a quote or send us a message for further inquiries. We’d like to help.

Feel free to connect with Mark Bromhead on Linkedin, Facebook and Twitter.