HSBC Life Insurance Review
Life insurance is an important financial product that can help provide financial security to your loved ones in the event of your death or terminal illness.
HSBC offers a range of life insurance products that can help provide financial protection and peace of mind to individuals and their family members. Please read the comprehensive HSBC life insurance review below and what the company offers, and decide whether it meets your needs and expectations.
Who Is HSBC?
HSBC is one of the world’s largest banking and financial services organisations that provides life insurance solutions through HSBC Bank and more comprehensive personal insurance plans through the bank’s financial advisers and selected intermediaries and brokers.
HSBC Life (UK) Limited is a subsidiary of HSBC Bank PLC and is authorised and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. As a member of the Association of British Insurers, HSBC Life (UK) Limited is committed to maintaining high standards in the insurance industry.
In 2022, HSBC Life (UK) Limited paid 99% of life insurance claims and 95.5% of critical illness insurance claims, indicating a solid track record of delivering on its promises to customers.
Types of HSBC Life Insurance Policies
HSBC offers both level life insurance and decreasing life insurance, with coverage up to £2,000,000, a minimum term of 5 years, and a maximum term to take you to age 80. The monthly premiums for HSBC life insurance are fixed for the duration of the cover, which can provide predictability and stability to customers.
Terminal illness benefit is also included with life cover through HSBC. An early death claim can be made if the policyholder becomes terminally ill and is appropriately assessed to have less than 12 months to live.
This benefit can provide additional financial support to the policyholder and their loved ones during a difficult time.
HSBC Level Term Life Insurance Policy
Level term life insurance is the simplest type of insurance plan for HSBC banking customers, and it is available as a joint policy for couples or partners, where only one person needs to have an HSBC bank account.
A level cover life insurance policy pays a lump sum of money if the policyholder dies within the term of the cover, and the amount of the payout is always the same.
This can provide financial security for the policyholder’s loved ones in the event of their unexpected death and can help cover costs such as outstanding debts, funeral expenses, or ongoing living expenses.
It’s important for individuals to carefully consider their life insurance needs and choose a policy appropriate for their specific circumstances.
An insurance expert can provide guidance and advice on the best life insurance options available so that you will be able to compare life insurance plans and choose the one that suits your needs.
HSBC Decreasing Life Insurance Policy
HSBC life insurance company also offers a decreasing life insurance cover, designed to cover an outstanding repayment mortgage balance. The sum assured decreases each month in line with the balance assuming an interest rate of no more than 7%.
This type of life insurance can provide a cost-effective way to ensure that an outstanding mortgage balance is paid off in the event of the policyholder’s death.
The decreasing cover amount is intended to match the repayment mortgage balance over the term of the policy so that the outstanding balance is fully covered at all times.
HSBC Critical Illness Cover Policy
HSBC critical illness cover provides a lump sum payment if the policyholder is diagnosed with one of the conditions listed in the policy terms and conditions. This lump sum payout can be used to pay off or pay down the policyholder’s mortgage or cover other expenses related to their illness.
Adding critical illness insurance to a life insurance policy can provide additional financial protection for the policyholder and their loved ones in the event of a serious illness or death. The premiums for this type of cover are typically fixed for the duration of the policy, which can provide predictability and stability to customers.
HSBC’s critical illness insurance covers 35 critical illnesses and surgical procedures. Some of the examples are:
- Cancer (apart from less advanced cases)
- Benign brain tumour
- Heart attack
- Major organ transplant
- Multiple sclerosis
- Parkinson’s disease
HSBC critical illness insurance – what are you not covered for?
While HSBC’s critical illness insurance policy covers a range of serious illnesses, some conditions are not covered.
- Aplastic Anaemia
- Loss of independent existence
- Chronic lung disease
- Ulcerative colitis
- Early-stage cancers
It’s important to carefully review the terms and conditions of any critical illness insurance policy before purchasing to ensure that it meets your individual needs.
It can be helpful to speak with a professional life insurance broker to understand better the different critical illness insurance policies available and what they cover.
An expert can help you compare different policies and find one that fits your unique circumstances and budget. Get a quote and compare plans to find the one that suits your needs.
Partial payments for critical illness are not covered under HSBC’s critical illness insurance policy, but they may be included in other policies offered by different insurers.
These partial payments, also known as “additional benefits” or “extra cover,” can provide financial support for less severe conditions that may not meet the full definition of a covered critical illness.
This can be particularly helpful for individuals diagnosed with a condition that affects their ability to work and earn income but may not meet the full criteria for a lump-sum payout.
HSBC Whole of Life Insurance Policy
Currently, HSBC does not offer a whole life protection policy as one of their life insurance products.
HSBC Income Cover Policy
HSBC income cover provides protection against periods of incapacity to work where you suffer a loss of income.
This type of insurance is designed to replace a portion of your income if you cannot work due to illness or injury. The income protection policy provides a regular monthly benefit, paid to you after an agreed waiting period and can continue until you return to work or until the end of the policy term.
The waiting period or the deferred period is the period of time that you have to wait before you can start receiving the benefit.
HSBC income cover offers two options: a 2-year cover option or a full-term cover option. The 2-year cover option provides a benefit for up to 2 years per claim, while the full-term cover option provides the benefit until the incapacity ends or up until the end of the policy term.
The policy covers up to 50% of pre-tax earnings, with a maximum cover of £50,000 per annum.
You can choose an initial waiting period of 4, 8, 13, 26 or 52 weeks. The policy includes a rehabilitation/proportionate benefit, which can top up an income that may be reduced after reducing hours or type of work due to incapacity.
HSBC Terminal Illness Benefit
HSBC’s terminal illness benefit is a common feature in many life insurance and critical illness insurance policies, and it provides policyholders with the peace of mind that they will be able to access some of the benefits of their policy if they become terminally ill and are not expected to survive for long.
The payment can be used to help with medical expenses or to provide financial support to loved ones during a difficult time. It’s important to note, however, that the terminal illness benefit only applies if the illness is deemed terminal and if the policyholder is expected to live for 12 months or less.
Advantages of HSBC Life Insurance
- You can take out both a life insurance policy and a mortgage or loan through HSBC, and your premiums and payout will be linked to your outstanding debt.
- HSBC offers a free accidental death benefit that will cover you for accidental death while your life insurance application is considered. Your loved ones would receive up to £250,000 if you died from an accidental injury while waiting for the policy to be approved.
Disadvantages of HSBC Life Insurance
- HSBC does not offer an increasing cover policy, which will increase your premiums but also your payout over time.
- Other insurers will cover more illnesses and conditions under their Critical Illness protection policies.
- As with most life insurance cover, if you stop paying your premiums, you won’t get any money back, and your coverage will likely stop.
How Much Does HSBC Life Insurance Cost?
The HSBC life insurance cost will depend on your personal circumstances, including the following:
• Your age
• Your overall health condition
• Your lifestyle
• Your occupation
• Your smoking habits
Age and smoking habits are some of the most important factors in determining the initial quote price for an HSBC life cover, critical illness cover, and income cover policies.
However, the final price can be influenced by other factors such as your overall health, medical history, lifestyle, and occupation. This is why it’s important to disclose all relevant information to the insurance provider so that they can provide an accurate and fair quote.
If you have any pre-existing health conditions or if you work in a job that is considered high-risk. In these cases, finding a policy that offers comprehensive coverage at an affordable price may be challenging.
An insurance specialist can help you understand your options and find the best policy for your individual circumstances. It’s always better to be upfront and honest about your health and occupation when applying for life insurance, as this will help ensure that your policy covers you in the event of a claim.
HSBC Life Insurance Calculator
As with many banks, HSBC offers a life insurance calculator, which is a valuable tool for determining how much life insurance you need.
HSBC’s life insurance calculator uses the following information to calculate your life insurance:
- Yours and your partner’s income
- Your children and their ages
- Mortgage balance
- University fees planned
- The period of time you wish to be covered for
While life insurance calculators like the one provided by HSBC can be a helpful starting point for thinking about your life insurance needs, it’s important to keep in mind that they are typically based on general assumptions and don’t take into account all of your individual circumstances.
The calculator’s recommended amount of life insurance is just an estimate and should be considered a general guide rather than a definitive answer.
Your unique circumstances and priorities may influence the amount and type of life insurance appropriate for you, so it’s a good idea to speak with an insurance expert to get a more personalised assessment of your needs.
HSBC Life Insurance Review FAQs
How much does HSBC life insurance cost?
The cost of life insurance from HSBC, or any other provider, will depend on various factors such as the level of cover, the type of policy, and your individual circumstances. In general, the cost of life insurance tends to increase with age, as older individuals are considered a higher risk to insure.
Other factors that can impact the cost of life insurance include your health status, your family’s medical history, your lifestyle habits (such as whether you smoke), and the length of the policy term. Some policies may also require a medical examination before approval, which could impact the cost of coverage.
Can I make changes to my HSBC life insurance policy?
Yes, you can. If your personal circumstances have changed, contact HSBC and ask to amend your current agreement. For example, if you have kids and would like to increase coverage, or conversely, if your children move out and you would like to lower your protection.
HSBC may also invalidate your policy if you fail to inform about certain changes. So even if you have started a new job or hobby or started smoking again, you might need to get in touch with HSBC.
Is the lump sum payment taxable?
Life insurance payments are free from income and capital gains tax for UK residents at the moment, but depending on the value of your estate, they may be subject to inheritance tax. It’s also worth noting that tax rules may change in the future, which as a result, can affect the tax implications on your payout.
How does the claims process work for HSBC’s life insurance?
You can claim your payment by phone by calling 0345 745 6125. If you’re based outside of the UK, you can call the facility on +44 1226 261 010.
To make the process go as smoothly and quickly as possible, it is best to have the policy number and the policyholder’s name to hand, along with other relevant details such as proof of death.
Further contact details:
Customer Services Centre HSBC Life (UK) Limited
PO Box 1053