This year has challenged businesses and our personal finances. Job loss and diminished profits will affect the next couple of years (maybe more for some) and recovery is crucial. Of course, this is not the first economic downturn we’ve faced but it’s certainly significant because it’s on a global scale.
Furthermore, the changes brought about by the pandemic not only affected people’s finances but there’s also the factor of lifestyle and the general way of how everyone “normally” went about their lives.
Now that we’ve watched this year play out and its end just around the corner, what can we do to position ourselves in a more crisis-ready strategy for our finances?
Here are the financial lessons we’ve learned from Covid 19:
HAVE A COMPREHENSIVE FINANCIAL PLAN
These plans should include:
– Long term and short term financial goals
– Contingency plans
It’s not enough to be able to pay our bills and run a business. Not losing money every month may give the misconception of stability but it’s important to have set goals to work towards a higher level of security.
Be specific about goals such as having both health and life insurance in place before the age of 35 to avoid higher premiums.
Another example would be finding the solution for events like losing 15%, 30%, or 50% of your income. (Hint: Loss of Income insurance may help)
It’s these specific goals that prevent us from being too anxious about sudden events such as this pandemic. Financial goals provide us with better foresight of where the gaps are so we can fill them as quickly as possible.
HAVE 3 TO 6 MONTHS’ WORTH OF EMERGENCY FUND
Save up money that’s worth three to six months before paying off debt. Having this safety net allows us to support ourself during uncertain times like job loss or low sales in business.
Once you start doing this, it’s also good to add two months each year to get to a total of one year’s worth of emergency savings. That will come as a huge advantage when coupled with unemployment insurance because it can further extend to over a year.
FIND MULTIPLE INCOME SOURCES
This doesn’t necessarily mean having two fulltime jobs. But it can help to explore part-time gigs that will not require too much out of our mental bandwidth. Perhaps a hobby could also become profitable. Having an alternative stream of income can be helpful in case we lose employment.
This pandemic has given rise to plenty of virtual work and it’s an opportunity to find an additional source of money to reach our financial goals much faster.
Putting money in low or medium-risk investments is also be worth exploring especially if there’s stagnant money in our savings account.
FINANCIAL STABILITY FIRST, DEBT PAYMENT SECOND
Debt can be negotiable because institutions will have mitigation departments to allow debtors to find workarounds when unable to pay. Banks and other lending institutions also want to be paid back so foreclosure would be counter to them in many cases.
This is why gaining stability is more important to achieve first than paying off debts. A more productive way of looking at this is being debt-free is one of the tools in gaining stability.
One may not have any debts now but if there’s no income coming in, that still puts that person in a stressful position. Having the money to pay for basic living expenses such as food, shelter and clothing are the top priority.
These four lessons apply even during normal circumstances but more so now that we see how a global crisis highlights our financial blindspots.
Need help with personal or business insurance in Hong Kong? We help expats find comprehensive plans for every need.
It’s impossible to eliminate all risks from a single insurance plan. However, layering your personal finances with a handful of essential covers immensely help with risks.
So what are the important insurance types you need to protect yourself and your family?
- HEALTH INSURANCE
There is a multitude of insurance plans to help you with the cost of healthcare. Health insurance takes care of hospital costs when you’re sick or in an accident. Most will acquire this type of insurance through an employer. Self-employed individuals will have to get this from the open market on their own.
Pro-tip on what to consider:
– Cost of premium
– The amount of deductible (out-of-pocket cost before the insurance comes in)
– Co-payment amount (the amount paid for a particular visit)
– Co-insurance (cost divided between you and the provider)
– Cap out-of-pocket cost (maximum cost before the insurance starts)
An important thing to remember when shopping for health insurance is that you should be aware of your anticipated health needs so that you can check if it’s part of the plan. So if you have a history of heart condition in the family or cancer is involved, be sure to find a plan that will assist with the cost of those specific conditions.
- LIFE INSURANCE
There are two main types of Life Insurance:
(1) Permanent Life Insurance – covers your lifetime
(2) Term Life Insurance – covers a certain period of time (e.g. 30 years)
Pro-tips: Term Life Insurance is generally more cost-effective because it protects you for a period when you’re least likely to die. This is, of course, if you get the plan at an early age.
In terms of the cost (how much you need to have covered), Village Insurance will always advise clients to consider their annual income. So if you need to replace your entire income, then you will need 25x your annual salary which is understandably a substantial amount. A positive outlook while thinking of that amount is that your family can withdraw around 4% from that amount for as long as the insurance is in place. If you want to replace an amount that covers certain things such as the mortgage, then you’ll need less.
- DISABILITY INSURANCE
This insurance plan also comes in two variants:
(1) Short term – for medical emergencies that prevent you from working (e.g. having a baby)
(2) Long term – for events that inhibit you from making a living for months or years.
Pro-Tips: Short-term disability becomes quite handy when your employer doesn’t offer paid maternity at work. To determine how much you need, make a budget plan for the amount you’ll need while you’re unable to work.
Also, keep in mind that long-term disability insurance has a 3-4 month waiting period before it begins replacing lost income. On top of running through a budget plan for how much you’ll need, check if your plan is subject to taxes as well as your condition’s impact on your social security disability income.
- DENTAL INSURANCE
Health insurance plans do not automatically cover dental. Dental care can be quite expensive especially in Hong Kong. Treatments beyond preventative procedures can cost thousands of dollars. Teeth implants and other restorative treatments are often overlooked but once they’re there, you’ll be glad to have dental insurance when you see the cost per visit.
Pro-tip: Get dental insurance before you actually need it, meaning, get it while you’re young. Premium will cost less. Also, like some insurance covers, there may be a waiting period for expensive treatments so add that into consideration when scheduling your appointment.
- HOMEOWNER’S/RENTER’S INSURANCE
Homeowner’s insurance covers both the house and all its contents. On the other hand, renter’s insurance covers what’s inside the rented space.
Renter’s Insurance is a must-have in Hong Kong. Some landlords may even ask for additional liability insurance from renters to cover the entire building in case of damage.
Pro-tip: There are plenty of reasonably priced renter’s policies in the market (some as low as $20 monthly). Village Insurance recommends getting this so you won’t have to worry about damages to the apartment that are beyond your control such as a fire.
For homeowner’s insurance, check your policy if it covers the current value of the property or the replacement value. You may also look for a plan that has add-ons to cover the cost of high-value items inside the house (e.g. jewellery, computer equipment).
Again, layering your finances with different insurance policies to take care of anticipated needs is the best way to protect you and your family from extreme loss of income.
Get in touch with us if you need help finding specific personal as well as business insurance while you’re staying in Hong Kong.
Let’s first define what professional indemnity (PI) insurance is.
This is a type of insurance cover that protects a company from incurring legal costs and expenses in their defence, as well as any damages or costs that may be awarded if they have been alleged to have rendered inadequate advice, services or designs that caused a client to lose profit.
It’s also often referred to as professional liability insurance.
In Hong Kong, it is compulsory for some businesses to take out liability or professional indemnity insurance before they can operate.
Here are some examples of professional indemnity insurance claims you may find useful:
Case Study 1
Government Statutory Board | 6 Staff members | HKD5.5M turnover
A claim was made against the Insured by one of its former clients. The claim alleged that the Insured failed to protect the claimant’s medical conditions whilst acting for the claimant in court, resulting in the claimant’s identity being easily searched online and discriminated against.
The Insured appointed panel solicitors to assist with managing the dispute. The Insured incurred defence costs of HKD280,800 which were indemnified by the Policy.
Case Study 2
Insurance Broker | 5 Staff Members | HKD3.9M turnover
A claim was made against the Insured by their client, a recreation club. The client alleged that the Insured misrepresented that their Directors and Officers Policy would cover the club’s own rights which were, in fact, incorrect when a claim was presented to the insurer and was declined. The claimant further alleged that the Insured failed to exercise reasonable skill and care whilst advising and obtaining adequate insurance.
The Insured appointed panel solicitors to assist in defending the matter against them. The claim was settled at mediation. The Policy paid a total for settlement costs of HKD1,482,000 and defence costs of HKD351,000
Payment: HKD1,482,000 plus HKD351,000 in defence costs.
Case Study 3
Logistics Operator | 8 Staff Members | HKD1.95M turnover
The Insured, a logistics operator, was storing vaccines in its Cold Room for their client. A claim was made against the Insured by their client alleging that there had been a fall in temperature in the Cold Room which was a result of a hardware malfunction, which damaged their products. The Insured notified Insurers for their Fire Policy as well as their PI Policy. The Insurers of the Fire Policy indemnified the Insured to the sum of HKD1,287,000 which was insufficient to meet the total replacement cost of the vaccines due to a global shortage in certain of those vaccines. One of the vaccine’s cost had increased from HKD29.02 to HKD519.87 per vial. The Claimant sought further damages of HKD1,950,000.
The Insured appointed panel solicitors to assist with managing the claim against them. The Policy was triggered and paid for defence costs of HKD117,000. The claim was settled at a mediation for HKD319,800 which was also indemnified by the Policy.
Payment: HKD319,800 plus HKD117,000 in defence costs
Need PI Insurance for your business in Hong Kong? We can help find the best insurance covers for expats.
Increased online activity by businesses – from e-commerce to remote project management – requires an added layer of privacy security. Digital interactions with clients as well as between employees also means there is extensive sensitive data (e.g. addresses, credit card details, private messages, etc.) being shared and stored.
Businesses that ask for personal information places them in a position of possible liability should there be a breach in their system.
Cyber Liability and Data Protection Insurance is designed to safeguard online users from damage and loss upon exposure to hacking or system errors.
Unfortunately, most businesses do not see the need for this type of insurance for reasons such as:
1. My business does not store sensitive data.
Most businesses will hold information about their employees or suppliers as a standard practice, meaning these companies are at a higher risk of being targeted for a cyber attack. Downplaying the likelihood of having your valuable data stolen may cause irreparable damage to your company’s reputation and operations.
In a time when remote work and online interactions are the status quo, businesses need to have all bases covered.
2. I don’t sell anything online.
Chances are, your business still uses computers to store digital files of receipts, invoices, and names of customers. Having a local server and the absence of online commerce does not exclude your business from cybercrime.
One has to factor human error, malware, and phishing even if your company is not engaged with Internet commerce.
3. The Cloud is highly secure.
A company is legally responsible for the information that is stored in their cloud, even if a hacker accesses the cloud via a 3rd party. This also applies if you’re using an outsourced IT provider. If the provider’s system is breached and your data gets leaked, your business may incur notification costs (to both the Privacy Commissioner and the affected individuals), remediation costs and legal costs. Encryptions and 3rd party security measures will not cover these costs.
4. The IT Department will take care of it.
Does your IT department work round-the-clock? That’s highly unlikely. A lot can happen in a few minutes, let alone overnight when everyone is off.
Having cyber liability insurance in place will provide you with a 24/7 response team that can help mitigate further loss and damages when an attack occurs.
5. Our system is top-of-the-line and can’t be hacked.
There’s not a single system that is 100% secure. Technology is ever-changing and cyber attackers are constantly finding ways to access your data. And while you may have the most secure system now, that still requires everyone in the company to have the same knowledge and competencies in using, managing and maintaining it.
Again, human error can’t be discounted which makes cyber liability insurance all the more important for any business.
We can help your business find the best cyber liability insurance in Hong Kong.
There are several risks factors for heart disease – some of which are preventable. They include hypertension, hyperlipidemia, smoking, diabetes mellitus, obesity, lack of physical activity and chronic stress. Genetics also plays a factor which can or can’t be controlled by medical measures. 
According to the British Heart Foundation, UK residents dying from heart and circulatory diseases before 75 was recorded to have risen in May 2019 for the first time in 50 years.  In fact, coronary disease is one of the top health problems among expats in Hong Kong. 
This is a cause for alarm given that pre-existing conditions such as heart disease makes one more susceptible to Covid-19. This is why it’s important to check-in if you or your family are at risk.
Simultaneously, we recommend that you revisit your current health insurance (if any), to see if you’re covered in case something happens.
Here’s a checklist to determine if you’re at high risk for heart disease:
> Increasing age – people aged 65 or older are at a higher risk
> Gender – heart disease is more prevalent among men.
> Family health history (as well as race) – Children of parents with heart disease are more likely to develop heart disease themselves. African-Americans have more severe high blood pressure than Caucasians, therefore, at a higher risk.
> Smoking – smokers and the people who regularly get second-hand smoke from them
> High blood cholesterol – note that a person’s cholesterol level is also affected by age, sex, heredity and diet.
> High blood pressure – this condition increases the heart’s workload, causing the heart muscle to thicken and grow stiff as one ages.
> Inactivity – a sedentary life can lead to poor blood circulation, high cholesterol, and other co-morbidities.
> Diabetes – Both Type 1 and Type 2 diabetics are prone to heart disease. The risks are even higher if blood sugar is not properly managed.
> Being overweight – obesity leads to heart disease and stroke even if there are no other risk factors.
If you think you’re at risk and checked off several of the factors mentioned above, visit a health professional and ask about preventive measures you can do to reduce risks.
In addition, make sure you’re health insurance can cover coronary disease-related procedures and check-ups to protect your finances and prevent the need to dip into your life savings.
Monsoon season signals the beginning of flu season – and with the world still trying to survive the coronavirus, is it still worth getting the flu shot even though it won’t protect us from Covid-19?
COVER ALL THE BASES
Stocking up on healthy food, vitamins, hand sanitizers as well as constant handwashing aren’t the only measures we can take to fortify our safety.
Getting the flu shot may not stop coronavirus but it could mean the difference between getting infected with mild symptoms or suffering (and possibly dying) from complications.
And since there’s a greater chance of a person getting the flu than the coronavirus, taking the vaccine is one of the best ways to stay healthy and avoid a mountain of medical bills.
Contact Village Insurance Direct for inquiries on medical insurance for expats in Hong Kong.
THE BEST TIME TO GET A FLU SHOT
In relevance to the ongoing pandemic and according to the CDC, people who have not received the flu vaccine for the current season and are planning to travel to regions where influenza activity is ongoing should get a flu vaccine to protect themselves during their trip.
In addition, the CDC recommends that everyone six months and older get an annual shot a three to six months before flu season starts.
STILL NEED TO TRAVEL? HERE ARE SOME TIPS:
– Be mindful and thorough with your research when you must travel to another country. The CDC provides updated information on seasonal flu activity throughout the world.
– During your trip, observe local guidelines such as mask-wearing and practice healthy habits.
– After a trip, closely monitor your health for seven days. In case one becomes ill with flu-like symptoms, immediately seek medical attention if they are severe.
For inquiries on travel insurance that covers repatriation and other measures to protect you during a pandemic, get it touch with us today.
With the increase in online transactions due to decreased in-store operations in Hong Kong, is your business covered for cyber threats?
Cancer takes more than lives. It also goes after a hefty amount of your savings.
In just a span of two years, half of all US cancer patients breeze through their funds, accentuating a total of $92,000 in twelve months.
This is all detailed in a new study called “Death or Debt? National Estimates of Financial Toxicity in Persons with Newly-Diagnosed Cancer” which was published this month. According to its findings, these heavy costs are mostly of risk to be shouldered by the elderly and those without insurance, among others.
In the US, cancer comes second to heart disease as the undisputed title-holder of the most notorious killer.
But unlike heart disease which has a pool of research and funds dedicated to it, the cost of cancer treatment, for any country is financially unfathomable. Annually, 1.6 million new Americans are diagnosed with cancer. From this, 600,000 barely finish treatment and die.
The healthcare system credits to spending $87.8 billion yearly for patients. Specifically, unfinished treatments resulting in death leads to a $130 billion cost.
A huge portion of treatment expenditure still falls on the patient. The American Cancer Society along with the Cancer Action Network reports that as of four years ago, findings revealed that patients still shouldered a total of $4 billion on their end just for seeking cancer treatment.
Crunching beyond the numbers
The core of the study took 9.5 million patients and 16 years to see completion (1998-2014).
Setting aside the statistics, the medical study delineates the kinks that needed to be worked out when it comes to medical budget and productivity.
The journal is an updated study from the same set of authors from five years ago and is published in the American Journal of Medicine. Initially, in the study’s first findings, it revealed that cancer, specifically, breast cancer, accounts for 33 million sick days among the US working citizens annually.
The update to the study echoes a more heartbreaking revelation: half of the cancer-afflicted patients within their study have started and been easily sunk into bankruptcy due to treatment expenses.
This brings a new reality to the table: that the economy pulls a really tensioned string even to cancer patients who struggle with the cost of treatment.
When toxicity seeps to your finances
A big danger lies in the fact that the risk for financial toxicity goes greater with cancer treatment. After years of fluctuation in the economy, one would think that the financial burden on the patients would’ve lessened but has so far remained consistent.
Grant Skrepnek, one of the paper’s writers believes the results were “shocking,” seeing as to how figures have reached higher levels, which he has seen in his 20 years in cancer research.
Despite the advent of immunotherapy, which is pegged as a vital tool for the possible elimination of cancer, Skrepnek believes that it also has downsides, such as its ability to hamper predictions for cancer trends.
Jennifer Singleterry believes otherwise and sees a bigger threat in short-term healthcare plans.
Singleterry, a senior policy analyst from the American Cancer Society is concerned with the coverage of these health care plans, which have a limited coverage and “caps” – which hurts finances as it doesn’t include cancer treatment.
She adds that dependency to these short-term plans will only be harmful to those afflicted will illness, who will be left with even higher insurance premiums.
What this ultimately reveals is another layer of fear added to cancer: first the diagnosis, and now the financial horrors.
Village Insurance Direct helps expats in Hong Kong find critical illness insurance. Contact us for inquiries.
As we go through different phases of our lives, so do our needs for health insurance cover. Does your current plan still cover your needs or are there parts of the policy that are not longer needed?
Health insurance covers must also adjust to the rest of your family member’s needs which is why it’s important to check with your provider every two years.
Here are questions you should ask when reviewing your policy:
1. Is my policy limit enough to cover my needs and my supplementary? There are policies that offer unlimited annual policy offers.
2. Do you have plans of moving or traveling more frequently? This means you might need a health insurance policy that covers the places you will be traveling. There are international health insurance covers that follow you wherever you are and plans that excludes the US or UK.
3. If you’re married and have a growing family, is your insurance plan able to adapt to maternity and child needs?
4. Do you need to add a policy for pre-existing, mental, hereditary, congenital and chronic conditions?
5. If you have a policy taken care by your current employer, you also need to evaluate if you’ll need a separate private medical insurance if there are plans of changing jobs. Check if the company health insurance covers for family members or for chronic diseases. If you have special medical needs and your company insurance does not cater to its treatment, an international health insurance cover should be able to take care of what’s lacking.
AS AN EXPAT, CONSIDER INTERNATIONAL HEALTH INSURANCE
This health insurance policy is generally comprehensive and can cover maternity and cancer treatment. It all depends on your needs as well as your family’s. Village Insurance Direct helps expat find affordable and complete international health insurance from established providers in Hong Kong.
As an expat, you need to foresee if you will be moving in the next years and having international health insurance that follows you wherever you will give you peace of mind in situations where a local hospital may be unable to provide for your needs. The advantage of having this type of insurance is also having local service from your provider’s customer support so you know exactly what your policy can cover.
Ask your insurance provider about your current policy. It is also crucial that you do your own research especially if you’re paying a substantial amount for medical insurance you yourself and your family.