Why I chose to DIY my Insurance

How many of us actually take time to read up and familiarise yourself with the different insurance policies and terms, examine your own portfolio periodically or even have an idea of the scope and coverage required? If you do not, then Do-It-Yourself (DIY) is probably not suitable for you. Personally, I have been doing the above and more, not because of my profession but the strong will to take control of my life.

Coming from the consumer’s angle, I am constantly looking for the most cost-effective coverage in terms of price, benefits and scope. I stress once again that I knew what I wanted. After doing my own financial review, I was at the stage of product purchase.

There are several ways from which I have approached on the DIY process.

Commission rebate sharing insurance companies

Commission rebate sharing is legal since 2002. MAS had lifted the outright prohibition on rebates contained in MAS Notice 304. This was in line with the Authority’s shift from a regulatory to a supervisory approach. However, do note on the assumption that rebates should not be so much so that it leads to inducement or over-buying of products.

When you purchase a policy that is eligible for commission rebate through us, we rebate up to 50% of the agent’s commissions we receive from the insurer of your policy back to you, after deducting an admin charge (S$26.75). We retain the remainder of the commission as our service fee.

All policies may be eligible for commission rebates, except the following:

Private Integrated Shield plans
Local Hospitalization plans
ElderShield Supplements
Plans using CPF monies

Type	Name	Premium	Rebate received over
Critical Illness	Aviva My MultiPay Critical Illness Plan III (Self)	$780.50	1st Year: $217 2nd Year: $129 3rd Year: $4
Critical Illness	Aviva My MultiPay Critical Illness Plan III (Child)	$752.00	1st Year: $211 2nd Year: $120 3rd Year: $3
Disability Income	Aviva IdealIncome (Self)	$539.24	1st Year: $153 2nd Year: $69 3rd Year: $0
	Total	$2071.74	1st Year: $581 2nd Year: $318 3rd Year: $7

I settled both mine and my child’s critical illness and disability income coverage through a commission rebate sharing company. Doing this had allowed me to shave off 28% and 15% off my premiums in the first and second year.

Direct Purchase Insurance products

Direct Purchase Insurance (DPI) is a class of broadly standardised products offering term insurance or whole life insurance, and which include Total and Permanent Disability (TPD) coverage. DPI also provides Critical Illness (CI) coverage if you opt for it.

In short, they are simple life policies sold without commissions and financial advice  with premiums 10% to 20% lower than comparable life insurance products. DPI is identified by the prefix “DIRECT” in the product name, when you seek to buy from the life insurance company’s customer service centre, or website if available.

Type	Name	Premium
Term Life	Direct – Etiqa Term Life (Self)	$412.00

My term life was purchased via the DPI method. While the coverage is limited ($400,000 limit per policy), my requirement is not exceedingly high and when combined with the death benefits from other term policies, it suffices.

Group Insurance – MINDEF & MHA

In recognition of NSmen contribution to national security, the MINDEF and MHA have jointly come up with MINDEF & MHA Group Insurance. As the pool is huge, this enables premiums to be cheap.

Type	Name	Premium
Term Life	SAF Group Term Life Insurance (Self)	$123.00

Being an NSman, enrolling into the group term coverage was a no-brainer as the cost versus coverage is considerably dirt-cheap. No medical check-up or underwriting is required for up to S$250,000 coverage, which I have happily stuck to.

Other insurance types

Type	Name	Premium
Hospitalisation	Aviva MyShield Plan 1 + MyHealth Plus Option A (Self)	$209.00
Hospitalisation	Aviva MyShield Plan 1 + MyHealth Plus Option A (Child)	$76.00
Accident Plan	Sompo PA Star Standard (Self)	$101.65
Accident Plan	Sompo PA Junior Bunny	$85.60
Travel	Sompo TravelJoy Deluxe Worldwide (Family, Annual)	$520.00

Some insurance types have to go through the traditional insurance agent route, such as hospitalisation plan. While general insurance such as Accident and Travel insurance could be purchased directly online with the provider, since the costs of the plans cannot be lowered in any other ways, I have always pen my insurance agent as a referrer to channel the commission to her.

While I do my own self-planning, I still do engage my insurance agent as she does not hard-sell her products. Product comparison and regular follow-up was her forte.

My advice, do seek your own insurance advisor if you are unfamiliar or unsure of the insurance policy. An insurance policy may be a long-term commitment with possibly significant financial losses if cancelled prematurely. You must know what you are embarking on before proceeding with any decision.