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Small price to pay for high cost of living longer in HK

Andrea Li

Insurance companies are revamping their products at a time when people are beginning to understand the challenges of living longer. Hospital Authority figures indicate life expectancy of males and females will increase to 82.5 and 88 years respectively by 2033, from 78.8 and 84.5 in 2005.

An AXA Protection Survey, conducted in 11 countries and regions, found health to be the top concern common among Hongkongers, more so than finances and other considerations. Respondents said they considered serious illness to be the number one threat to their lives, followed by car accidents and unemployment.

Despite these findings, the survey also found that few thought about protecting themselves against death, disability and financial problems.

Only about 40 per cent of the city's population is protected by some form of medical insurance, bought either by their employer or on their own.

Nevertheless, this is changing as more Hongkongers are buying health cover because of greater awareness of cancer, according to insurance professionals. 'People in the past just didn't live long enough for cancer to hit them,' said Barry Chan, ING Life Insurance's general manager, marketing.

Hospital Authority figures also show cancer is indeed a reality today, with as many as one in four men and one in five women expected to develop the disease at some point.

'People have become more health conscious than ever before and are more concerned about the treatment they receive,' said Ann Coughlan, managing director in Hong Kong at health insurance provider Bupa. She added that cancer was up there with heart disease as one of the major items of insurance coverage.

'We have identified cancer as an area of importance because the treatment often takes a long period of time and can be costly. Just the planning and consultation period alone can be costly. People can find their benefit gone before they even begin the course of treatment,' she said.

Medical costs were also on the rise, outstripping that of inflation by at least 3-4 per cent in recent years, said Jason Sadler, HSBC Insurance's managing director in Hong Kong.

Although it was difficult to estimate the cost of cancer care, given the various forms of treatment and types of cancer, Venus Cheng, a social worker at the Hong Kong Cancer Fund's CancerLink Support Centre in Wong Tai Sin, a non-government organisation which provides cancer care and support services to patients and families, said a basic cancer treatment bill could easily range from HK$200,000 to HK$300,000. The growing understanding of cancer and the hefty costs involved has underpinned the growth of sales in critical illness products.

Bonita Leong, Manulife International's vice-president for marketing and finance, attributes part of the interest to Hong Kong's medical reforms.

'People would previously have depended on the government for treatment of serious illnesses, but they are realising they can't always rely on public hospitals for the treatment of all [serious illnesses]. That has, in turn, fuelled more people to buy medical insurance, particularly critical illness products,' she said.

Part of the medical reform has included the launch of the Hospital Authority's drug formulary list in public hospitals which requires patients to self finance a range of alternative and more expensive drugs. On the list are the most advanced chemotherapy drugs.

'The majority of patients we come across do not have any health insurance, and are often caught in a dilemma when they are given the choice of purchasing the more advanced chemotherapy treatments or sticking with the basic course of treatment,' Ms Cheng said.

'This can place great pressure on patients as they have no idea how much more effective these new drugs might be.

'Obviously, having insurance will at least help ease the financial burden,' added Ms Cheng, whose organisation runs a hotline offering support and financial advice to patients.

'In some cases, I have seen some cash-strapped patients borrowing money from family or friends while others have resorted to selling their home.' She noted patients typically considered taking the more expensive drugs if their cancer had returned or if the disease was at an advanced stage.

Some of the changes made to insurance products by companies have been similar, most notably extending the cover age to 100 years, offering consumers access to a second and even a third medical opinion in United States hospitals and in-patient specialist care.

However, insurance companies have their own particular care feature to distinguish their products.

Bupa CarePro, Bupa's most comprehensive medical insurance scheme, offers an annual benefit of HK$100,000 for kidney dialysis, chemotherapy and other advanced cancer treatments, such as CyberKnife and Gamma Knife.

Manulife's Cover-Me-Again option allowed patients to renew their cover even after illness, at a time when many in the business would traditionally be wary about providing this feature, Ms Leong said.

AXA Smart Medical Insurance plan is offering a 15 per cent no-claim discount to customers as a reward for those who have not made any medical claims in the past three consecutive policy years.

'We understand that people sometimes feel insurance can seem like a waste if they don't use it so we hope this discount offer might encourage more people to subscribe to health insurance,' said Alvin Lam, AXA's head of advice.

Those considering health insurance should look carefully at the fine print of the agreement and have a good grasp of what it covered, what it excluded, exemption periods and preconditions before signing on, insurance providers warned.

'Some people don't think about health insurance until they are ill or someone close to them is sick,' Ms Coughlan said.

'As a rule of thumb, insurance should be bought the younger the better so as to give yourself peace of mind.'

Although the penetration rate of health insurance is not high, Hongkongers are considered receptive to insurance products, with the AXA Protection Survey showing about 70 per cent of the respondents believing insurance products could protect them and their families and give them a peace of mind.

'I think health insurance will grow in the same way as retirement savings following the implementation of the Mandatory Provident Fund,' Mr Sadler said. 'It will become increasingly more common in the future.'

Hong Kong Cancer Fund's CancerLink hotline: 36560800. It offers cancer information and answers questions, and offers emotional support to patients and their families. Financial advice is one of its many services.

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