Hong Kong’s medical system is facing ever-increasing pressure. In order to provide protection both for elderly people and for children, the Voluntary Health Insurance Scheme (VHIS) recently launched by the government is undoubtedly the best choice. When you purchase a VHIS policy, besides the special offers, you can also get more tax deductions if you insure for your family members at the same time!
Formula for calculating VHIS tax savings: Insurance Premium x Tax Rate
The calculation of tax savings for VHIS is very easy. Simply multiply the insurance premium by the corresponding tax rate of the taxpayer and you will get the exact amount of tax savings.
Suppose a taxpayer purchases VHIS from Manulife (either the “Manulife Shelter VHIS Standard Plan” or “Manulife First VHIS Flexi Plan”). For a 30-year-old male, the annual premium for the standard plan is $1,832. If the tax rate of the taxpayer is 6%, the tax savings amount will be $109.9. Please note that the tax-deductible amount of the insurance premium is capped at $8,000 per insured person per year.
Buying VHIS for your family? The higher the tax rate of the insured, the larger the tax savings amount
Another attraction of the VHIS is that a single taxpayer can insure for “eligible dependant(s)” (see Table 1) and get the dependant’s tax deduction for insurance premium in his or her personal capacity. Therefore, it is recommended that the taxpayer with the highest tax rate in the family should insure for the whole family so as to receive the highest amount of tax savings.
| Table 1 : Eligible Dependant for VHIS |
| 1. Taxpayer’s spouse and children |
| 2. Taxpayer’s grandparents, parents and siblings |
| 3. Spouse’s grandparents, parents and siblings |
Take a family with six members as an example. The tax rate of the son who has just started his career is 2% after deducting all allowances, whilst the tax rate of the father is the highest at 17%. If the father insures for all family members (see Table 2), the tax saving will be greater. This is equivalent to purchasing insurance “at a discount”.
| Table 2 : Father as the policyowner to purchase health insurance for the whole family | ||
| Family Member (Age) | Annual Premium* | Tax Saving at a Tax Rate of 17% |
| Son (20) | $1,410 | $239.7 |
| Daughter (21) | $1,673 | $284.4 |
| Mother (50) | $4,613 | $784.2 |
| Father (53) | $4,358 | $740.8 |
| Grandfather (81) | $15,397** | $1,360 |
| Grandmother (78) | $13,514** | $1,360 |
| Total Tax Savings： | $4769.1 | |
| *According to the premium of “Manulife Shelter VHIS Standard Plan” **Tax-deductible amount capped at $8,000 |
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Look for Special Offers when buying VHIS for your family
There are various VHIS products on the market. To choose the best medical care for your family and yourself, you should pay attention to whether you can find better offers whilst purchasing health insurance. At present, insurers such as Manulife, Chubb and FTLife have launched special offer packages for purchasing VHIS (see Table 3).
| Table 3 : Special Offers of VHIS on the Market | |
| Insurer | The Highest Savings |
| 宏利 Manulife | 12% premium discount for the first two policy years |
| 安達人壽Chubb | Up to HK$450 premium discount |
| 富通保險 FTLife | Up to 8 months of premium refund for the first policy year |
Chubb special offer is applicable to customer purchases an Eligible Basic Plan at the same time or holds an inforce Eligible Basic Plan, whilst FTLife’s offer involves refunding a one month of premiums. Also, customer can enjoy up to 7 months Extra First-Year Premium Refund for the VHIS plan upon successful application for any VHIS plan and any Designated Plan.
Apply for Manulife designated plan(s) to enjoy premium discount*. This is a simple and straightforward special offer package, without insuring extra plans, currently available in the market.
*Subject to terms and conditions. Please check for more product and offer details from the product/promotion leaflet on the website.
Want to learn more about the government’s VHIS? Read our VHIS Guide!
Chinese version
買自願醫保扣稅兼有優惠？全家投保攻略懶人包