Hong Kong residents reluctant to use insurance policies to donate to charities, survey finds
Many are unaware of the option, while family members deter others from naming a charity as a beneficiary
Hongkongers are reluctant to use life insurance policies to make charitable donations, with opposition from family members being a major reason, a study has found.
The study, conducted by local charity Lok Sin Tong Benevolent Society, involved 131 questionnaires collected online in July.
While 77 per cent of respondents said they had bought life insurance, only 35 per cent said they were willing to name a charity as a beneficiary.
“Reluctance from family members is the major reason for this phenomenon,” Lok Sin Tong chairman Kyran Sze said. “Indeed, as many as 66 per cent of respondents had no idea they could do this until we conducted the survey,” he added
There are two ways to involve a charity. A donor can either name a charity as the policy’s beneficiary and it will receive the proceeds when the donor dies, or he or she can transfer ownership of the policy to a charity while alive.
About 7, 000 insurance policies involving donations to charities have been taken out since 2005,according to LifeCare Movement, an organisation that aims to popularise the LifeCare Education and Policy Donation programme in Hong Kong. They are worth HK$230 million.
“We cannot see any legal or financial risk for donors as a life insurance policy is a kind of personal asset,” chairman of the organisation Matthew Wong said. “But we would like to suggest that donors understand the background and mission of beneficiary organisations before making any donation.”
A total of 275,730 new insurance policies were taken out in the first quarter of this year, according to the Office of the Commissioner of Insurance, suggesting that many Hongkongers had the habit of buying insurance only for themselves and family members.
“Basically, it is very difficult to promote policy donations in Hong Kong,” Lok Sin Tong chief executive Alice Lau said. “We are planning to publicise it within our organisation first as our members will then have more trust in us.”