Term & Whole Life Insurance
Compared — Which Is Best?
Compare term and whole life insurance from top HK insurers. See coverage, premiums and exclusive discounts side-by-side — find your ideal plan in 3 minutes.
What Is Life Insurance?
What is life insurance? Life insurance is a contract between the policyholder and the insurance company. When the insured person passes away, the insurer provides a lump-sum death benefit to the designated beneficiary as immediate financial support. If the insured is the primary breadwinner of the family, the death benefit can help the beneficiaries (parents, spouse, children) ease the financial burden caused by the insured's passing, such as repaying outstanding mortgage loans.
Types of Life Insurance
There are various types of life insurance available on the market, including term life, whole life, universal life, and variable life insurance. Each product differs in payout amounts, policy structure, and premiums. MoneyHero explains the definitions and features of each type to help you find the plan best suited to your personal needs, family situation, and financial circumstances.
Term Life Insurance
Term life insurance, also known as pure life insurance, provides only a fixed death benefit with no savings component. It covers a specific period, such as 10 years, 20 years, or until the insured reaches a certain age.
If the insured passes away during the coverage period, the insurer pays the benefit to the beneficiary in a lump sum or instalments. If the insured survives the coverage period, the insurer does not provide any payout, nor are premiums refunded.
During the specified coverage period, premiums are fixed once confirmed and will not be adjusted due to changes in the insured's health. If the insured wishes to extend coverage, most insurers offer renewal services. However, upon renewal, the insurer may adjust premiums and coverage based on factors such as the insured's health and age.
Whole Life Insurance
Whole life insurance is a type of life insurance with a savings component that provides lifelong (or up to age 100) death benefit protection. It features both "guaranteed returns" and "non-guaranteed returns," meaning the policy's value increases over time and can serve as an investment vehicle.
The insured can choose to withdraw cash returns during the coverage period, or accumulate the earnings through compound interest until the insured passes away, surrenders the policy, or the coverage period ends, at which point the total amount can be claimed in a lump sum.
Although whole life insurance provides lifelong coverage, premiums remain fixed throughout. The premium payment period for whole life insurance generally ranges from 3 to 30 years or more. The insured only needs to pay premiums during the payment period; once completed, no further premiums are required, while life coverage remains in effect.
Universal Life Insurance
Universal life insurance is similar to whole life insurance, offering both savings and insurance functions. The key difference lies in flexibility. Universal life insurance provides greater flexibility in premium payments and account value withdrawals. Some insurers allow policyholders to apply for premium adjustments as long as the account meets specified conditions. Policyholders can also withdraw cash value according to policy terms or use account interest to pay premiums.
Investment-Linked Life Insurance
Investment-linked life insurance provides life coverage and investment options. If the insured passes away during the coverage period, the insurer pays a death benefit. The policy also has an account value that fluctuates with the investment performance of selected funds or assets. The death benefit is typically calculated based on the total premiums payable, total premiums paid, and account value, while the account value will not fall below the minimum death benefit required by regulators.
Whole Life vs Term Life Insurance
Should you opt for whole life or term life insurance? MoneyHero has analysed the pros and cons of both types of life insurance to help you compare which is more suitable for you.
In terms of premiums, since most term life insurance policies have no savings component and shorter coverage periods than whole life insurance, premiums are relatively lower. While term life insurance allows renewal, the insurer may adjust premiums at renewal based on factors such as health and age. Whole life insurance premiums, on the other hand, remain unchanged throughout the contract period.
Regarding policy cash value, term life insurance has no savings component, so there is no surrender cash value — it is a non-participating type. Since whole life insurance covers both death protection and savings opportunities, a portion of the premiums converts into cash value upon surrender.
In other words, term life insurance is more suitable for individuals with a lower premium budget who need short-term coverage. Whole life insurance is better suited for those with lifelong financial goals who want to manage wealth flexibly at a low cost.
Term Life Insurance Comparison Table
MoneyHero has selected 5 different term life insurance plans for comparison, covering their coverage periods, age restrictions, coverage items and percentages. Below is the detailed comparison table.
| FWD MyTerm Plus (Upgraded) — Standard | FWD MyTerm Plus (Upgraded) — Superior | Blue WeCare Term Life Protection Plan TF1 | Bowtie Term Life Insurance Plan | Zurich EaZy Term Life Insurance Plan | |
|---|---|---|---|---|---|
| Entry Age | 19-66* | 19-66* | 18-65 | 18-65 | 19-71* |
| Policy Coverage Period | 1/10 years | 1/10 years | 1-30 years; or to age 65 | 1 year | 1/5/10 years |
| Death Benefit | 100% | 100% | 100% | 100% | 100% |
| Advance Death Benefit | 100% | 100% | N/A | N/A | 50% of sum assured or HK$1,000,000 (whichever is less) |
| Additional Accidental Death Benefit | N/A | ✅ | N/A | N/A | N/A |
| Double Indemnity Benefit | N/A | ✅ | N/A | N/A | N/A |
| Suicide Clause Period^ | 13 months | 13 months | 24 months | 1 year | 1 year |
*FWD and Zurich entry age limits are calculated based on age next birthday
^If the insured commits suicide within a specified period from the policy issue date or reinstatement date — regardless of the insured's state of mind at the time — no death benefit will be paid.
What Is the Process for Claiming Life Insurance?
The first step to claiming any insurance is to complete the claim form. Most insurers provide either physical or online claim forms.
After completing the claim form, you need to prepare the required documents as specified by the insurer, such as the original death certificate, the policy document, copies of the deceased's and beneficiary's ID/passport, proof of relationship between the deceased and beneficiary (marriage certificate, birth certificate), medical reports, etc.
Once all documents have been submitted, the claims adjuster will investigate the case. After confirming that the claim meets the payout conditions, the insurer will pay the benefit to the beneficiary using the payment method selected when the claim was submitted. Common payment methods include bank transfer, FPS (Faster Payment System), and cheque.