For those of you who don’t already know, MAS recently launched a new web portal called CompareFIRST. The website allows consumers to compare life insurance products of different companies, thus improving the transparency of the insurance industry significantly.
On the same day, Direct Purchase Insurance (DPI) can be purchased directly from customer service counters, or websites of life insurance companies. The rationale behind is that DPI premiums are lower than comparable life insurance products because they are sold without any commissions or financial advice.
Let us walk you through the CompareFIRST website and then share our views on the relevant segments of the website that we feel are important.
A pop-up will greet and welcome you before anything else, and more importantly, it offers to bring you for a tour around the website. It provides several steps to give you a holistic view of the homepage and what you can navigate from there. It is quite similar to Massively Multiplayer Games (better known as “MMO”) games, where you are given a dry run on what you need in order to kick start your journey.
After the brief tutorial, the first thing most of us will be doing is to compare the different types of insurance products, as listed in the different color boxes. Meanwhile, there is also a button “Not sure what to search for?” to help those who have questions in mind. After asking a few questions, it will either point you to the insurance types that you need, or point to the moneysense.gov.sg website for you to understand more.
Going back to the previous point and the screenshot on where we want to evaluate our insurance, we will select for ourselves a simple product to illustrate how the platform works.
Disclaimer: The example below is simply for illustration purposes. It does not, in any way, constitute as advice given.
Without further ado, we are directed to a page where all the insurers are listed. The number of plans available may overwhelm you but do not worry. To start off, we unchecked a few sub categories to focus on the “Level Sum Assured without Option to Renew”, and proceeded to compare the products based on the premise that the term coverage will be at 58 years. Again, purely for illustration purposes.
Thereafter, our selection boils down to only 3 policies! Now we can hit the “Compare” button and see what happens next. In this summary page, you can look at the policies in 3 important areas:
- You will Pay (Rundown of the total premiums paid over the number of years)
- You will Receive (Sum Assured and Benefits)
- You Should Know (Something along the lines of the subtle Terms & Conditions that you should understand)
All in all, we feel that this is a good website as well as a very positive initiative set by the government, which is not something we can say every other day. With this in place, many people can now do their own due diligence before entrusting their hard-earned money. Moreover, buying an insurance policy is often a lifelong commitment as there involves huge opportunity costs if it is withdrawn before the maturity.
Last but not least, knowledge is power. Having all this information at your fingertips would mean that you do not have to simply take the words of financial advisors only. We foresee that in the near future, financial advisors will be there to assist, rather than to teach or lead you to what should be bought.
That being said, the immediate challenge in Singapore is that almost all of us are used to getting the advice and buying insurance policies through a financial advisor. It will not be easy for Singaporeans to suddenly decide that they will start buying insurance directly on their own. Moreover, without the right education on insurance, people may not be able to choose wisely on the type of products that they need. The last thing we want is to go from getting bad advice from some financial planner, to giving ourselves bad advice.
More likely than not, individuals who are keen to buying insurances directly will need to start reading up and educating themselves first. If you like to find out more about how you can use web aggregators, DIY Insurance is giving a talk on 25 April on how you can do so. While it might be a different platform, we are pretty sure the selection criteria to take note of will be quite similar to CompareFIRST so there is no harm knowing. Ultimately, you will not be able to buy insurance directly without first educating yourself.
You can sign up for the talk through this link. It is complimentary.
(Editor’s Note: DIYInsurance is now MoneyOwl. MoneyOwl is Singapore’s 1st Bionic Financial Adviser where human wisdom and technology come together to deliver best-in-class financial advice that integrates national schemes. Visit www.moneyowl.com.sg today.)