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

TypeNamePremiumRebate received over
Critical IllnessAviva My MultiPay
Critical Illness Plan III
(Self)
$780.501st Year: $217
2nd Year: $129
3rd Year: $4
Critical IllnessAviva My MultiPay
Critical Illness Plan III
(Child)
$752.001st Year: $211
2nd Year: $120
3rd Year: $3
Disability IncomeAviva IdealIncome
(Self)
$539.241st Year: $153
2nd Year: $69
3rd Year: $0
Total$2071.741st 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.

TypeNamePremium
Term LifeDirect – 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.

TypeNamePremium
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

TypeNamePremium
HospitalisationAviva 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
TravelSompo 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.

2 thoughts on “Why I chose to DIY my Insurance

    1. I checked with Sompo, upwards revision of premiums (for new and renewals) take place from 30 April 2019. So yes, the brochure which you see on their website is the most updated one. I am still on the old pricing for one more year (this year).

      Like

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