HSBC life insurance review

“HSBC” is the second largest financial services and banking company, which has more than 7,200 offices, more than 128,000 employees and approximately 89 million clients (in 2011). In the end of 2011 “HSBC” had the third largest market capitalization among companies from FTSE 100 index. Moreover the company operates in 85 countries and has structured its business activities into 4 main groups: commercial banking, personal financial services, global private banking and global banking & markets. The company has almost 3 trillion dollars of assets.

In UK “HSBC” also operates in the insurance market. Those interested in this company’s services can choose from various types of insurance products: travel insurance, home insurance, pet insurance, car or life insurance. As for life insurance, “HSBC” offers three plans: life cover, critical illness cover or income protection benefit.

Life cover

“HSBC” offers life cover services to its clients. It pays out a lump sum of money after the death of the person or after the diagnosis of a critical illness. Two types of policies are provided to the clients: level cover and decreasing cover. The main difference is that level cover offers fixed amount of cover throughout the term of the insurance while for decreasing life insurance the amount assured decreases during the time the person is insured.

The minimum term of insurance contract is five years, however, it must be remembered that the policy must end before the 70th birthday if the term is fixed. Moreover, “HSBC” life insurance policies have no cash in value. This means that if the policy is terminated the person gains nothing from his paid premiums.

Furthermore, accidental death and terminal illness benefits are included in the policy. It is also important to remember that there are some exclusions to the policy. First of all, the policy will not pay out if the terminal illness is diagnosed within the last 18 months of the policy. Secondly, it will also not pay out if the death of the person was caused by HIV or AIDS or if the individual has committed a suicide within the first 12 months of the policy.

Critical illness cover

“HSBC” also offers its clients critical illness cover insurance, which is designed in such a way that it pays out a lump sum of money if the person is diagnosed with one of the critical illnesses from the specified list provided by “HSBC” or the person undergoes a necessary covered surgical procedure. It is important to remember that in order to get critical illness cover, the person has to be resident in UK, between 18 and 60 years and the policy must end before his 70th birthday if the term of the insurance is fixed and before 65th birthday if the term of the insurance is not fixed.

Moreover, the company offers two different options to its clients: level and decreasing covers. Level cover is favorable to the person as it guarantees that the sum assured will stay fixed and will not decrease throughout the term of the insurance contract. One minus is that the premiums will be higher for this plan compared to the decreasing cover.

Decreasing cover offers the condition that the sum of cover will decrease gradually until the end of the contract. It can be considered as a good option for those who have some financial obligations such as a mortgage and their main aim by taking out the insurance policy is to protect themselves from inability to pay out the debts.

Income protection

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“HSBC” also gives their clients the ability to choose income protection insurance. It is possible to choose from two types of income protection: income cover and income cover (5years). If the first type is chosen than the monthly benefit can be paid until the selected term or the 65th birthday of the insured person. However, if income cover (5years) is taken than the monthly benefit can last only for a maximum term of 5 years. Moreover, the amount of income the person gets cannot be higher than the statutory sick pay (SSP). Thus, it is important to look through and calculate the necessary cover in order not to pay higher premiums for the income that cannot be claimed. Furthermore, the policy has no cash in value and monthly payments will start either when the employee stops to pay for the work or after 13 weeks have passed from the date the incapability has been diagnosed.