What happens to the death benefit of a life insurance policy if the insured?

When you buy life insurance, you should be looking for a policy that gives you the most protection for the most reasonable amount of money.

We recommend you to follow these steps when considering a policy:

  • Decide how much protection you need
  • Determine how much you can afford to pay
  • Select from the various kinds of policies available and choose the one that best suits your needs
  • Select a trustworthy insurance company 

2.     What kinds of life insurance are there?

Under a life insurance policy, the insurance company will pay a sum of money to the beneficiary upon a certain event, usually the death of the insured. Life insurance companies offer a variety of policies, so it is helpful to understand the basic concept of each kind before buying one. Basically, there are three traditional types of life insurance:

(i) Term Insurance

Term Insurance covers the insured for a specified period of time. At the end of the term, the policy expires. Death benefits are payable to the beneficiary if the insured passes away within a specified period. Generally, among the three types of life insurance, term insurance provides the largest immediate protection at the lowest initial cost.

Some term insurance policies are renewable. Each time you renew the policy for a new term, the premiums may become higher as your age increases. Before deciding on this kind of insurance, you should check how much the premiums will cost at a later stage in life and the length of time the policy can be continued for.

Some term insurance policies are convertible. This means that before the end of a certain period of time, you may convert your term insurance policy into a whole life or endowment insurance policy or any other policy specified by the insurance company regardless of the health status of the insured. Premiums for the new policy will be determined based on the new insurance policy and the age of the insured at conversion.

(ii) Whole Life Insurance

Whole life insurance generally provides protection up to age 100 of the insured or more. The premiums are based on the age of the insured at the time the policy is taken out, and usually the same premium rate will apply throughout the policy term (unless otherwise specified by the insurance company). Unlike term insurance, whole life insurance builds up cash value, which you may use in various ways.

(iii) Endowment Insurance

Endowment insurance is primarily a plan that guarantees you a certain amount of cash at the end of a specified period. If the insured passes away before this specified period, the death benefit is paid to the beneficiary.

All three types of life insurance just described are different but by no means mutually exclusive. Many plans combine the features of all three. With the variety of products available today, you should be able to find a policy that suits your needs. 

3.     What are investment-linked assurance schemes ("ILAS")?

Investment-linked assurance schemes ("ILAS") are life insurance policies with benefits linked to the performance of your selected investment options. Like all insurance policies, your investment in an ILAS is subject to the credit risk of the issuing insurance company. In general, investments in ILAS are long-term commitments as ILAS are designed to be held for a period of a number of years. Surrendering or cashing-in early could involve charges.

4.     How much life insurance is enough?

If you are the insured, one way to determine how much life insurance is required is to calculate how much cash and income your dependants would need if you were to pass away. Take into account the expenses of a final illness, funeral expenses, personal loans and any debts you may have. Your insurance policy should provide cash for these costs as well as your family's living expenses, education, and other future expenses.

Whatever policy you decide on, it should come as close as you can afford to reduce the difference between: (1) how much your family would actually need, and (2) what your dependants would be left with.  

5.     What is the ideal premium?

When it comes to life insurance, the least expensive policy is not necessarily the best one. Instead of looking for the lowest price, look for a policy that offers you all the options and benefits you want to meet the present and future needs of your family.

6.     If I apply for a life insurance plan when I am young, is the premium cheaper?

Yes. In general, older individuals carry a greater risk, and their premium is calculated at a higher rate. In some cases, the insurance company may even reject an application from an individual if his/her health condition is not satisfactory.

7.     What are the benefits of life insurance?

Life insurance is one of the simplest and most efficient ways to guarantee your family is protected. Because death creates expenses, insurance proceeds not only provide your family with a way to pay for the initial expenses but also gives them the cash they need to continue on.

What's more, with whole life insurance, you receive additional cash value in your policy and, depending on the type of insurance, you may even receive dividends.    

8.     Is medical examination a must when applying for insurance products?

No. The insurance company will look at the applicant's age, the total sum assured and the applicant's health status before deciding whether a medical examination is required. The applicant must declare his or her health condition and any past medical history in order for the insurance company to underwrite the application.

9.     What is a suicide clause? Is the insurance company required to pay the death benefit if the insured commits suicide?

A life insurance policy usually has a suicide clause, which governs the payment of policy benefits if the insured commits suicide. If the insured commits suicide within a specified period counting from the policy issue date or any subsequent date of reinstatement, the amount payable may be limited to a refund of premiums paid. If the insured commits suicide after the specified period, the insurance company is required to pay the death benefit.

10.   What is an incontestability clause? 

Such a policy clause usually states that except for material misrepresentation, fraud or non-disclosure, the insurer will not contest the policy after it has been in force during the lifetime of the insured for a specified period counting from the date of issue or any dates of subsequent reinstatement. The incontestability provision will also apply to any riders attached to the policy unless stated otherwise.

11.   Can my relatives in Mainland China apply for an insurance policy?  

Yes, they can. As all the corresponding procedures (including business solicitation, application and the signing of all relevant documents) must be completed in Hong Kong, the applicant must come to Hong Kong in person. At the same time, he/she has to provide the entry proof at our Premier Customer Service Center; a designated medical service provider or any designated representative assigned by the insurance company for verification of the related documents.

12.   How can an insurance consultant assist me in financial planning?  

An insurance consultant can be a valuable asset when it comes to financial planning in today's complex and fast-moving world. A good insurance consultant is a professional backed by all the resources of a reputable company. He/she is usually highly trained and experienced in analyzing the financial needs. A pre-sale financial needs analysis can help potential customers evaluate their insurance needs and financial circumstances, so that they can understand more whether the insurance options available can meet their situation. What's more, his or her expertise can be very useful in helping you to set up a comprehensive program that not only meets your present needs but your future security as well.


For Policyowners

1.     Where should I keep my insurance policy?

Keep your policy in a safe place where it can be easily accessed by the beneficiaries. Make a note of the policy number and where the policy can be found. By following these simple rules, a claim can be submitted promptly in the event of the insured's death.

2.     Does my policy become ineffective if I lose the policy contract? Or will this affect any claims under my policy?

No. Losing the policy contract will not render your policy ineffective. Your policy will remain in force as long as a renewal premium is received within the grace period. Claims will not be affected as well even if the policy contract is lost. Moreover, policyowners can easily apply for the policy contract to be re-issued with administration charge.

3.     Can I check my policy information online? 

Yes, you may access our official website and log in at the e-Service Portal to enquire about your policy information.

4.     Is there any grace period for premium payment? 

Yes. We provide a 31-day grace period or 1-calendar-month grace period commencing from the premium due date, depending on the products. For details, please refer to the specific policy provisions.

5.     How can I change my autopay account? 

You can simply complete a direct debit authorization form. It generally takes six to eight weeks for your newly appointed bank to complete the authorization procedures. As such, you are required to settle two months' premium payment in advance.

6.     What is cash value? 

Whole life insurance and endowment policies build cash values which are payable upon policy surrender or maturity. The cash values generally increase every year while the policy is in force. Some whole life insurance and endowment policies allow you to borrow against a certain percentage of the cash value by submitting a loan request form. The loan is subject to interest payments.

In the event of non-payment of premium, with an "Automatic Premium Loan" clause in your policy and provided there is enough cash value to cover the amount of the outstanding premium, the outstanding premium will be advanced as a loan against the policy. The main objective is to keep the policy in force so as to protect the interests of you and your loved ones. Again, the loan is subject to interest payments. 

7.     What are dividends?

There are two types of dividends - Annual Dividend and Terminal Dividend:
Participating products have either an Annual Dividend, a Terminal Dividend, or both. Dividend is your share of the divisible surplus that the Company may earn and is a non-guaranteed benefit. Whether dividends are payable and the dividend amounts are at the sole discretion of the Company. Annual Dividend is determined and allocated to the participating policy on the policy anniversary. The dividends allocated to your policy may be used in a number of ways. Other than cash withdrawal, policyowners can leave the dividends with the Company to accumulate with interest, to buy additional paid-up insurance protection or to pay your premiums. Terminal Dividend is discretionary and may be paid in addition to the life insurance proceeds upon death of the insured, in addition to the surrender value upon policy surrender, or in addition to the maturity value upon policy maturity. This Terminal Dividend cannot be applied towards the purchase of reduced paid-up insurance, extended term insurance or to determine the loan value. For certain products, Terminal Dividend may also be paid upon occurrence of certain pre-defined events in addition to death of the insured or surrender or maturity of the policy. 

8.     How can I make changes to my insurance policy?

For prompt changes to an address, a beneficiary or a policy detail, you may contact your insurance consultant or our Premier Customer Service Center for assistance. Alternatively, you can also login Chubb Life's e-Service Portal to check policy details and download corresponding service request forms via the internet.

9.   How do beneficiaries make a claim?

When the insured passes away, the beneficiaries should immediately notify Chubb Life, quoting the numbers of all policies involved. An original death certificate is required for verification and the beneficiaries must complete a Claim Form(s) specified by us. Payments on claims are sent to the beneficiaries through insurance consultants after Chubb Life receives the completed Claim Form, all of the necessary supporting documents and approves the claim. Our insurance consultants are fully versed in these procedures and will provide help and advice to the beneficiaries in their time of need.

10.   What are the channels for making an enquiry or giving feedback?

If you wish to send us an enquiry or give us some feedback, you may contact our Premier Customer Service Center through the following channels:


Chubb Life Insurance Company Ltd. 22/F, Chubb Tower, Windsor House, 311 Gloucester Road, Causeway Bay, Hong Kong

Office Hours:

Monday - Friday 9:00am - 6:00pm  Saturday 9:00am - 12:30pm (Sunday and public holidays closed)

Customer Service Hotline: +852 2894 9833 Fax +852 2577 0866


[email protected]

Upon receipt of feedback, we will acknowledge receipt and designated person is responsible to handle the case. We will proceed with the investigation/fact-finding and respond to you accordingly.  

11.   If I wish to make an enquiry to or seek assistance from a regulatory body, which organization should I contact?  

The following regulatory or self-regulatory bodies have been set up for the benefit of policyowners, regulating and disciplining the insurance intermediaries to ensure the highest level of professionalism within the insurance industry:

The above information is for reference only. For further details, please refer to the policy contract, contact your insurance consultant or call our Customer Service Hotline at +852 2894 9833 for assistance.

What happens to the death benefit of a life insurance policy?

A permanent or whole life policyholder may take out loans or withdrawals against the cash value of the policy while he or she is still alive4. After the insured passes away the whole life insurance death benefit is distributed to beneficiaries, but any excess cash value may be retained by the insurance company.

What happens if the insured dies after the term of a term life insurance policy?

Unlike permanent life insurance, term life insurance stays in effect for only a certain period of time—such as 10, 20, or 30 years. If you die during that period, your beneficiary will receive a payout from the insurance company. If you die after the policy has expired, there will be no payout.