Demand for indexed universal life ( IUL ) insurance policies has surged in Hong Kong after authorities eased restrictions on the sale of these complex investment products.

Although exact sales figures for IUL policies in Hong Kong are not yet publicly available, successive launches of IUL products by leading insurers over the last four months indicate strong demand from high-net-worth individuals ( HNWIs ) and other affluent clients.

Before March 2025, the Hong Kong Monetary Authority ( HKMA ) and the Insurance Authority ( IA ) restricted the sale of IUL products amid concerns about their complexity, risk profile, and suitability for retail investors.

But on March 13, the IA and HKMA issued a joint circular relaxing rules for IUL products, allowing them to be offered exclusively to professional investors and HNWIs, following a regulatory shift designed to broaden the range of insurance products targeting HNWIs and other affluent clients seeking offerings on wealth accumulation and legacy planning.

First in the market

Since then, at least five leading insurers have launched IUL products, all targeting HNWI clients, including Sun Life, YF Life, FWD Hong Kong, HSBC Life, and Transamerica Life Bermuda.

Sun Life, which claims to be the first to launch an IUL product for professional investors in May, has reported strong demand, noting that policies with insured amounts of HK$100 million ( US$12.8 million ) or above accounted for 11.9% of total sums insured in 2024. While this did not include the recently launched IUL products, it’s an indication of strong demand.

On August 4, FWD Hong Kong launched the “Imperial Fortune” IUL plan, which it developed with UBS Global Markets. FWD reported a 50% year-on-year increase in new business annual premium equivalent in 2024, driven largely by the HNWI segment. This also suggests strong uptake for products like IUL.

HSBC Life introduced the HSBC Aspire Prime IUL on July 7, designed to provide policyholders with the opportunity to capture potential growth in leading indices, including S&P 500, Hang Seng Index. and the LBMA Gold Price Index USD AM. HSBC noted a YoY doubling of new business premiums from HNW clients.

YF Life, backed by major shareholders Massachusetts Mutual Life Insurance Company ( MassMutual ) and Yunfeng Financial Holdings, launched its IUL on July 28, noting that the offering incorporates Hong Kong-centric features, such as flexible premium structures suited for entrepreneurs and investors with volatile income streams. The product is being marketed with a strong local identity to make it resonate among clients seeking regional expertise.

On August 8, Transamerica Life Bermuda launched the Opus One IUL, designed for HNW clients with cross-border financial needs and features a volatility-managed uncapped index account.

Exact sales figures for IUL policies in Hong Kong are not yet publicly available; such data are typically proprietary or reported with a lag by regulatory bodies. Also, as IUL products cater to a niche market, aggregate sales data may be less frequently disclosed compared to broader insurance categories.

The latest available data from the IA, for example, are provisional statistics for 2024, and those for 2025 may not be published until 2026. Still, the authority’s provisional statistics for 2024 show a 28% increase in annualized new premiums for long-term insurance business, reaching US$547 million, with IULs contributing to this growth this year due to their strong appeal to HNWIs.

Unique features

Unlike traditional universal life policies with fixed interest rates, IUL offers potential for higher returns based on market performance, while typically including a floor to protect against losses.

Compared to traditional insurance policies, IULs are more complex products, typically with features such as fixed policy charges, surrender-charge-free partial withdrawals, monthly automatic transfers to manage market volatility, and multiple death benefit payout options. These cater to the HNWI’s need for flexibility, liquidity, and estate planning.

Some IUL products may offer unique features, such as HSBC’s gold-tracking option and FWD’s uncapped index tie, which differentiate them in a competitive market.

In a study published in April, KPMG warns that insurers may face challenges in sales compliance, risk governance, and derivatives operations for IULs as they manage the complexities and robust production designs of these products.

Also, IULs are restricted to professional investors, requiring insurers to verify client eligibility under the Securities and Futures Ordinance, which may limit the market size but ensures targeted sales.