This article was written in collaboration with DIYInsurance. All opinions expressed in this article are the independent views of DollarsAndSense.sg
In the internet age we live in today, a lot of valuable information can easily be found online. Whether it’s searching for the best value-for-money meal in town, the cheapest air fare or simply discounts on our groceries, many of us are savvy enough to compare prices to get the most bang for our buck.
Logically, we should be applying the same approach to our insurance matters as well. Very often however, people tend to bypass the basic step of finding out more and comparing between insurance plans they are seeking to buy.
This, to a large extent, is counter-intuitive. If we are already doing so much research in order to get the best deals in many other areas of our lives, why do we not do the same, if not more, research when buying an insurance plan?
This is even more puzzling when we take into consideration the fact that insurance plans are generally long-term in nature and one of the most important financial commitments we will make, rather than one-off expenses.
This makes a compelling case for everyone to do some research and comparisons for any insurance plans they intend to buy.
How To Compare Insurance Plans?
There is a perception that comparing insurance plans can be quite complex and time-consuming. This is because we may be unwilling to meet up with financial advisors from different insurers in order to get a quote from each of them. It takes time and substantial effort from both us, the consumers, and the advisors.
However, there are better, faster and more convenient ways to get a quick life insurance quote.
The easiest way is to simply use an insurance comparison platform. One such platform is Do-It-Your-Way-Insurance (DIYInsurance). DIYInsurance is Singapore’s first life insurance comparison web portal developed by MAS-licensed financial advisory firm, Providend in June 2014. It allows consumers to compare many different types of insurance plans such as protection, savings and retirement income.
To highlight the difference in insurance premiums, and how much you can potentially save by choosing the right insurance plans, here’s an example based on a comparison that we made on DIYInsurance.
To generate this comparison, here were our inputs:
30-year-old male; buying term life death insurance coverage; $1million till age 65.
This was the result generated.
Based strictly on price, we can see that the premium difference between the most affordable plan and the next comparable plan is $217, or about 20% lower.
Over a period of 35 years, this difference may add up to be about $7,595. This is certainly a significant sum that consumers shouldn’t just overlook.
Is The Cheapest Insurance Plan Necessarily The Best?
While it’s simple to just go with the cheapest insurance plan, we need to realise that it may not necessarily be the best plan for us. We need to understand that despite appearing similar, most insurance plans are not entirely the same.
For a start, if our assumptions were to change and we were buying for an older person, we may find that the ranking of plans based on price alone may no longer be in the same order. Hence, we should never conclude that a plan which is cheapest for someone else would also always be the cheapest for us.
We should not just be fixated on comparing premiums alone, but rather, look at other factors as well.
DIYInsurance helps consumers find the key unique features that each plan offers in a quick and easily digestible format.
After doing a several rounds of comparisons across different types of insurance products, you may realise that while price may be a key factor in determining the plan you should purchase, it’s not the only thing you should consider.
For example, certain life insurance plans may allow you to add riders such as a critical illness plan to your main policy. This is useful as it allows you to have additional health insurance coverage, without needing to buy a separate standalone insurance plan.
What If I Need Someone To Advise Me?
For many consumers, buying a life or health insurance plans online without anyone advising them may not be natural or something they’re comfortable with. After all, insurance is an advisory-based activity for many of us. Beyond just reading articles on insurance, comparing quotes and doing online research, we may also want to speak to a professional advisor to hear what they have to say or if they can advise us to better protect ourselves.
DIYInsurance has a team of MAS-licensed advisors who are tasked to understand the needs of their potential clients, and to ensure that their clients are buying products suitable for them. As a rule, they will schedule a face-to-face meet up after an online comparison and enquiry is submitted through the DIYInsurance platform.
During these face-to-face meet ups, potential clients can also ask any other questions that they may have, be it for the plan that they have opted for, other similar plans, or any other insurance related questions that they may also have.
DIYInsurance advisors are salary-based employees, and not commission-based. This means the advisors receive no commission for selling insurance plans. Their main responsibility is to ensure that clients fully understand the insurance plans that they are intending to buy, and that these plans are suitable for them. If there is a need for claim-servicing, these advisors are also responsible to help clients with the claims process.
Both the comparison platform and the advisor consultation sessions are free. In addition, DIYInsurance also provides clients a 50% rebate in agent’s commissions, which is given on top of any other promotions.
However, we think of the 50% rebate as the cherry on top of the cake for consumers buying through DIYInsurance. Our viewpoint is that, regardless of how you choose to buy an insurance plan, it always makes sense to compare the feasible insurance options across different insurers before committing to one.
Do you have enough insurance coverage? Here’s a step-by-step guide for a DIY self-check.