Investment-linked products are set to start a new trend in the insurance market in Hong Kong, according to Manulife Insurance.
'We foresee business will shift from traditional life [insurance policies] towards investment-linked products,' said Diana Kwan, assistant vice-president, individual marketing at Manulife, the second-largest life insurance company in Hong Kong.
'Competition for such products will increase and customers' awareness and receptiveness will improve accordingly.'
The company's Flexible Income Protector (FIP) is an example of a 'living insurance' policy, a new product in the market.
This investment-linked insurance policy, launched in 1995, allows an insurance-holder to cash out money during his lifetime without affecting the insurance protection.
'No longer are insurance policies merely providing financial help to relatives on the death of the insured but, more importantly, living insurance policies will provide [financial] assistance during one's lifetime whenever there is a demand for cash,' said Ms Kwan.
According to Manulife, an investment-linked insurance product is one that offers life protection as well as investment, such that part of the premium paid is put into investment funds and the rest is for insurance protection.