FAQs > Levy FAQs to Life Insurance
What is levy?
From 1 January 2018 onwards, a levy on insurance premiums for insurance policies will be payable to the Insurance Authority by policyowners via insurance company under Insurance (Levy) Order and Insurance (Levy) Regulation in order to support the operational cost of IA. Levy is calculated based on the levy rate on the premium payable per policy. There is a levy cap per policy per policy year.
When will levy become effective (for both new business and inforce policy)?
New business: Any policies with policy inception date (which is the Commencing Date in the Certificate of Life Assurance) on or after 1 Jan 2018 are subject to levy.
In force policy: For all in force and premium paying policies, first levy is payable for the policy when it reaches its anniversary date in 2018.
When do I need to pay levy? What will be the consequence if I do not pay levy on time?
Levy has to be paid when the premium is paid. Policyowner must pay levy together with premium. Policyowners shall commit an offence and be liable to a pecuniary penalty not exceeding HK$5,000 for failure to pay the levy in a timely manner.
What will Prudential do to notify me on levy arrangement?
Prudential will issue written notification to existing clients for levy between Oct and Dec 2017 to notify the levy arrangement.
How can I know the levy amount I need to pay? Will Prudential issue levy payment notice to me separately?
Premium Notice, Premium Reminder and Overdue Notice will list out the total sum of premium and levy payable to facilitate policyowner to arrange payment. myPrudential will be enhanced to show the total payable (including premium and levy payable) to ease policyowner reference. And Policy Anniversary Statement will display the premium and levy amount separately.
If I don’t want to pay the levy through Prudential, can I pay to IA directly?
Cannot. Under Insurance (Levy) Order and Insurance (Levy) Regulation, policyowner have to pay levy to Insurance Authority via insurance company.
I have set a withdrawal limit on my autopay of insurance policy payment, what should I do for the implementation of levy?
You may request to reset the withdrawal limit with the bank, change autopay account, or change payment method for for future premium and levy.
If I pay premium via overseas credit card, do I need to pay the administration fee for levy?
Levy is subject to administrative fee if you use overseas credit card for premium and levy.
Any impact on my policy coverage and return after the implementation of levy?
Levy will not affect your insurance coverage or return.
Will my policy be terminated If I didn’t pay the levy?
Implementation of levy does not affect the continuity of insurance coverage. If you pay premium only without levy, policy will not be terminated. However, Policyowners shall commit an offence and be liable to a pecuniary penalty not exceeding HK$5,000 for failure to pay the levy in a timely manner.
Can I apply for addition of benefits / policy changes if I do not pay levy? These changes may affect the premium amount, will levy be adjusted correspondingly? And do I need to pay the levy difference to complete the application?
If the policy change request incurs a premium adjustment, the difference in premium will be subject to levy. Furthermore, the policy change request will only be completed upon settlement of all outstanding levy, if any.
Will Prudential deduct the levy from Automatic Premium Loan ("APL") in case my policy is now paying by APL? If yes, any loan interest incurred on levy part?
Prudential shall deduct levy by Automatic Premium Loan ("APL") if any renewal premium of the policy is being paid by APL and such levy shall be part of APL on which interest shall be charged in accordance with the policy provisions. However, if the cash value of the policy is insufficient to settle both premium and levy, only premium will be deducted by APL. You have to settle all levies separately.
Can I deposit a certain amount of money to my Premium Deposit Account for future levy?
No. According to the law, policyowner must pay levy when premium is paid, therefore, policyholder is not able to pay levy in advance, except that advance levy is paid together with the advance premium.