Hong Kong people have a hard time acknowledging mortality

PEOPLE IN HONG KONG do not have enough life insurance protection, according to research conducted by Swiss Re.

The Swiss firm had assessed life protection coverage in several markets, including Hong Kong, over the past few years and found all of them wanting to varying degrees, said David Alexander, life manager, Hong Kong and Macau.

According to Swiss Re research, there is a 'life protection gap' (the difference between the amount of life insurance cover a person has and what he or she requires) of US$320 billion in Hong Kong. Among other countries surveyed, there was a gap of US$474 billion in Australia, US$640 billion in Italy and more than the US$234 billion in Taiwan.

However, these totals may be less relevant than the per capita figures. And here, Hong Kong falls well behind the other places surveyed. On a per capita basis, Hong Kong is estimated to be US$457 short of life cover, a far bigger gap to plug than the US$250 in Australia, US$141 in Italy and mere US$98 in Taiwan.

But exactly how much cover is enough? This would depend on a person's individual circumstances, said Mr Alexander, who recommended that people seek the advice of a qualified financial adviser.

'For example, if you have a person who is unemployed with no dependents, there is no need for any cover, and they probably could not afford it anyway. At the other end of the scale, you might have a senior executive with a family, including school-going children and a big mortgage.'

For its Hong Kong study, Swiss Re took what it judged to be the average case of a working person with dependents on a salary of $15,000 a month, or $180,000 per year, as the basis for calculating the protection needs.