Buying insurance has always been a topic that we put off until our financial advisors remind us.
A major reason why we put it off is that we find that buying insurance is complicated and hard to comprehend. But what if there’s an easy way to find insurance bargains?
Here are three things you need to know to find bargain deals in insurance.
1. Online aggregator by MAS: CompareFIRST
As smart consumers, we always make comparisons before we decide to make a purchase. This applies to most of the things that we buy, except insurance.
We often end up buying from our financial advisor without comparing his/her recommended product with similar products in the market.
This is because, in the past, if we want to compare with other insurance products, we need to get in contact with other financial advisors.
First, we have to contact three other financial advisors from other insurance companies. Then, we have to spend an afternoon with each of them to listen to their explanation (and inevitably listen to their sales pitch).
Not only is this time consuming, it is also confusing for us, especially since every financial advisor will sell the same benefits, which sounds the same regardless of the insurance company.
To allow consumers to make comparisons, Monetary Authority of Singapore (MAS) released an online aggregator known as CompareFIRST.
Through CompareFIRST, you can obtain general product information on life insurance policies without having to meet up with separate financial advisors.
The rationale behind CompareFIRST is to empower consumers like us to make more informed decisions about purchasing life insurance products.
2. Buying directly from insurers to avoid commission: DPI
Ever wondered why there are so many insurance agents that are circling around like sharks at MRTs, shopping malls or even knocking on your door?
This is because insurance companies are paying these agents a sizeable commission to get you to sign a deal with them.
Whenever you sign a new insurance policy with an agent, 20-50% of your first-year premium goes to them as commission.
If you continue to pay premiums to keep the policy in the second year, 15-40% of your second-year premium goes to your agent as commission.
So, the natural question we want to ask is, “Are there any ways we can avoid these commission as consumers?”.
You might be delighted to know there is a way you can avoid paying commission to your agent for the life insurance policy that you are buying.
In order to avoid paying commission, you can buy the policy directly from the insurance company through their website.
These policies are known as Direct Purchase Insurance (DPI). As DPI are sold without financial advice, no commission is charged.
Thus, you pay lower premiums than comparable life insurance products. The following companies offer DPI to consumers that are commission-free:
- AIA Singapore Pte Ltd
- Aviva Limited
- AXA Life Insurance Singapore Pte Ltd
- Etiqa Insurance Pte Ltd
- FWD Singapore Pte Ltd
- Great Eastern Life Singapore Pte Ltd
- HSBC Insurance (Singapore) Pte Ltd
- Manulife (Singapore) Pte Ltd
- NTUC Income Insurance Co-operative Limited
- Overseas Assurance Corporation Limited
- Prudential Assurance Co. Singapore (Pte) Ltd
- Tokio Marine Life Insurance Singapore Ltd
3. Using CompareFIRST and DPIs to find bargains
One way to find the right DPI is to use CompareFIRST to search for the right type of insurance. Under the search option, you can choose the DPI option, which will help you search and compare only DPIs.
So, if you are planning to get a life insurance, why not try out CompareFIRST and DPIs to get a better bargain?
Oh, and if you are familiar with e-commerce, you would know that there are promo codes that can help you save even more on your premiums!
The author of this article is not affiliated with CompareFIRST or MAS, and everything expressed in this article is only based on the author’s opinion and personal experience.