Financial Planning | Personal Finance | Article

3 Ways To Buy Insurance In Singapore

by Asher Mak | 25 Nov 2021 | 6 mins read

This article is sponsored by MoneyOwl.

Buying an insurance policy has become so popular among young adults that it has almost become a rite of passage to adulting.

While purchasing insurance only forms one part of financial planning, it is a crucial component. It gives us peace of mind as it promises financial protection when we’re faced with a costly personal crisis.

Here, we examine three different ways to buy insurance in Singapore.

Through a commission-based insurance agent

This first method would be the one that most of us are familiar with. When we started our careers in our 20s and began drawing an income, we’d usually get invited out for coffee by our childhood friend(s) who might have begun a career in insurance.

These agents are personable and provide face-to-face consultations to recommend insurance products to cover your insurance gaps.

They’re usually available for a meetup, call or through text, which many will find convenient. They’re also able to answer our list of queries and provide solutions that can mitigate financial risks.

If you like a hassle-free experience without having to think or crunch numbers, then the convenience of engaging with an insurance agent probably caters to you. But before signing up for any insurance policies, just be sure to read and understand your policy terms and conditions. You can even get your agent to explain the parts that you don’t understand.

The downside of using an insurance agent is that you won’t be able to compare the insurance products being sold to you with those offered by other insurance companies. If you’re the type who enjoys shopping around for deals and comparing prices, then maybe this is not the solution for you.

These advisors are also commission-based, so they might be incentivised to sell you as many products as possible from their company, regardless of whether it’s suitable for your needs. Keep that in mind and hold tightly to your insurance budget and don’t feel pressured to buy everything the agent recommends.

Independent fee-based advisors

A less common type of insurance agents in Singapore are the non-commission, or fee-based advisors. Fee-based advisors are involved in various aspects of a client’s financial life, including covering investments and insurance. Because they don’t earn a commission, you can count on them to give unbiased advice on what insurance coverage to get.

A great aspect of independent, non-commission advisors is that they are not tied to a particular insurance company. Hence, they can provide you with a range of options from various companies and customise a plan for you.

There are tied vs independent agents (tied meaning they only represent one company while independent means they represent several companies); and there are are commissioned, fee-based and salaried advisers (commissioned means they earn commission for every product sold, fee-based means you pay a fee for consultation/advice, not the product, and salaried means adviser is paid by company for performing a task).

As such, instead of breaking it out to too many groups, we have decided to use independent fee-based advisors.

As the name suggests, these advisors are fee-based and will charge you a fee for the advice they render, and time spent giving you a one-on-one consultation. However, since they are remunerated based on a fee rather than the products they sell you, there is a greater impetus to deliver a professional and well-thought through plan based on your financial needs.

If you enjoy personal service and want to tap into an expert’s up-to-date information on insurance products from a myriad of companies, this is probably the best option for you. Just like commission-based advisors, the fee-based advisor will streamline the paperwork for you.

Buying online through an insurer

Finally, the internet has revolutionised many industries and insurance is no exception. Just like how you can cop the best deals on furniture, clothes and even groceries from online stores, you can also shop for insurance online, if clicking on “add to cart” excites you.

Buying insurance online is a great method if you dislike meeting agents face-to-face or spending time on phone calls. You can shop in the comfort of your own home and do extensive research, comparing various plans without the pressure to purchase.

Of course, if you’re not already financial savvy, looking for insurance online can be a steep learning curve as you familiarise yourself with the jargon, what a policy will cover, and their implications.

This option is not for those who like to kick back, relax and enjoy service with a smile. Afterall, shopping for insurance is not as simple as buying clothes online so getting either a commission or fee-based agent can help you navigate your insurance needs more conveniently.

Content sponsored by MoneyOwl

A message from our sponsors:

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This way, you can research insurance plans at your own pace and also get personal advice when needed through MoneyOwl’s comprehensive insurance selection and personal client advisor services.

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