This article was written in collaboration with DIYInsurance. All views expressed in the article are the independent opinion of DollarsAndSense.sg
Over the past few years, we have written extensively about Do-It-Your Way Insurance (DIYInsurance), Singapore’s first life insurance comparison web portal launched in June 2014.
Our articles cover how you can use DIYInsurance to do a simple self-check on the coverage gap that you have to what happens when you need to make a claim on an insurance policy. Based on all we have written, it’s easy to see how DIYInsurance can be a useful solution for your insurance planning.
However, it’s also important to note that just because a platform is good, it doesn’t mean that it’s perfect. In this article, we share some pros and cons of DIYInsurance, having done research and also being a customer of their platform. This way, you can better understand its benefits and limitations, even if you have never used DIYInsurance before.
As always, let’s start with the pros first.
Pros # 1 Compare Prices And Solutions Online
The same logic applies when we buy insurance. Before committing to an insurance policy, we should compare similar policies we need across different insurers and products.
And that’s exactly what DIYInsurance helps you with. Whether its protection plans such as critical illness or life insurance, savings plans for your child’s education or retirement income plans such as an annuity, users can compare products online, based on their personalised inputs such as age and gender, without needing to speak to anyone.
Pros # 2 Salary-Based Advisers
One of the biggest advantages of using DIYInsurance is that they only have salary-based financial advisers. This is a rarity in Singapore, where most insurance agents and financial advisers are commission-based.
Like the majority of us, salary-based financial advisers are paid a fixed monthly salary each month. This also means they do not receive any commission when they sell you a product – this ensures that they only recommend you the product that best suits your needs rather than one which pays out a high commission.
How DIYInsurance works is that interested consumers submit an online enquiry. The enquiry will be passed to a DIYInsurance adviser, who will follow up with a call or an email, and to provide the necessary financial advice to the client if required.
Since they are salary-based advisers, conflicts of interest which typically arise when an agent is only remunerated when they sell a product is reduced. Advisers are also enabled to provide focus on providing appropriate financial advice rather than worry about hitting sales targets or generating new leads for next month.
Pros # 3 Customised Solutions
There is a misconception that buying through DIYInsurance means having to go without professional advice or getting a customised solution. This is untrue.
When a user selects the products(s) that he or she is interested to buy, a DIYInsurance adviser will follow-up with the individual to ensure that the selected product is suitable for the individual based on their individual situation, including their actual needs, requirements and income. If required, the adviser will propose alternative solutions which may be more suitable.
Similar to all other financial advisers out there, DIYInsurance advisers are obliged to ensure that their clients receive the most suitable advice. Just because a client has chosen to purchase a product online on their own does not mean that advisers are not responsible in making sure these products are the right choices for him or her.
Now that we have gone through some of the pros of using DIYInsurance, let’s look at some of the cons.
Cons # 1 Insurance Planning Only
If you are an avid reader of DollarsAndSense, you would know that personal finance planning goes well beyond just insurance. We also need to have a plan for our monthly expenses, investments, housing, savings and retirement needs.
DIYInsurance, as its name suggests, focuses largely on insurance planning and to a smaller extent, some savings and retirement planning needs. However, if you are looking to invest and grow your wealth, you can certainly opt to look beyond DIY Insurance to find other products and/or platforms more suitable for investing your money.
It’s worth noting that Providend, the parent company of DIYInsurance, charges a fee-only service to help their clients with their investment and retirement goals. Providend is Singapore’s first fee-only financial advisory firm.
Cons # 2 Limited Comparison Tools
If you have used DIYInsurance tools for comparison before, you would realise that the comparison tools are somewhat limited.
For example, if you were looking for death coverage, you would realise that DIYInsurance only provides quote for either $500,000 or $1,000,000.
This means if you want to get a term life insurance quote for less than $500,000 or more than a $1,000,000, you would need to speak to an adviser directly.
Likewise, when we tried getting a quote for a whole life early stage critical illness plan, we found limited option to choose for the sum assured. There is only one coverage amount available – $50,000.
This isn’t to say that the platform isn’t good, but rather, that there are limitations that it’s not been able to currently address.
Cons # 3 You Have To Be Proactive
I am a client of DIYInsurance. I have also bought insurance policies from other agents as well.
One of the biggest differences I noticed during my experience with DIYInsurance is that you, the consumer, need to be proactive. Similar to spending time researching on the best cabin on a cruise ship, DIYInsurance is better suited for those who are better informed and more proactive with their insurance planning.
For example, meetings with the advisers are held in their office, as compared to many other agents who may come to your home or wherever is convenient for you. And since many of the advisers work regular office hours just like you and I, you may need to take some time off work in order to fit in your meetings. However, the advisers do see clients in the evening or Saturday mornings if there are requests to do so.
While the advisers are there to ensure due diligence and answer your questions, I also noticed that I find myself in the driver seat of having to ask my own questions in order to clarify any doubts I may have for a product.
The experience that you get is similar to walking into a shoe shop. The friendly staff are there and available to answer any questions that you may have, but only if you choose to ask them. Otherwise, they will give you the space you need to slowly browse through what you are looking for.
Improvements Are On The Way
Prior to this article, we had a conversation with Christopher, CEO of Providend, which is the parent company of DIYInsurance. We discussed some of these limitations with Christopher and he shared with us that some major improvements for DIYInsurance are on its way. Also, DIYInsurance will be going through a rebranding exercise and they will be offering more services in the very near future. These “exciting changes”, according to him, will be announced soon, before end of October.
Of course, this isn’t to say that the existing DIYInsurance platform isn’t good enough but rather, a recognition from the team that the platform can continue to improve as the company aims to provide more value for consumers in the future.
Consider Giving DIYInsurance A Try
You don’t have anything to lose by giving DIYInsurance a try. If you have already spoken to an agent and are still unsure about the products being sold to you, it will take you less than five minutes to compare it across other products in the market.
Lastly, the above pointers are by no means an exhaustive list of the pros and cons of DIYInsurance. If you have tried it for yourself, you may have other viewpoints. But for those of you who have never tried it before, we hope this article helps you understand what to look out for when using DIYInsurance so that you can make a better financial decision for yourself.