The launch of Direct Purchase Insurance (DPI) by life insurers in early April resulted in fewer than 200 policies being sold up to June 30 amounting to almost $200,000 in weighted new premiums.
The Life Insurance Association (LIA) disclosed the numbers at a briefing yesterday on its performance in the first half of the year.
DPI products are basic life plans sold without financial advice and bought directly from insurers' customer service centres or websites.
From April 7 to June 30, 193 of these policies were sold, of which 97 per cent were regular-premium term-life policies. These plans provide affordable protection and are suitable for people looking for basic family protection.
There was also some demand for whole-life policies, which offer lifelong protection with some savings element.
LIA president Khoo Kah Siang said: "We are encouraged to see the number. The industry's focus is on helping individuals narrow their protection gap. This is another avenue for customers, particularly self-directed individuals, to access insurance."
Mr M. Salim, chief executive of Avallis Financial, said it was not surprising that the lion's share of sales came from term-life plans as they are more straightforward and simple to understand.
Financial advisory firm Providend's DIYinsurance portal has recorded new business annualised premiums of $310,000 from 130 policies this year, of which $275,000 in premiums and 112 cases were achieved since April.
Providend chief executive Christopher Tan said: "If consumers are buying plans with a sum assured that is higher than $400,000, it is cheaper to buy from DIYinsurance than a DPI product. And this is even before our 30 per cent commission rebates. On top of that, they get advice from salary-based advisers which CompareFirst portal and DPI do not have."
The LIA noted that life insurers recorded weighted new business premiums of $1.35 billion from January to June, a 3 per cent growth over the corresponding period last year.
The industry achieved a 3 per cent growth to $964.9 million of weighted annual-premium products and a 2 per cent rise to $387.8 million in weighted single-premium products, of which 19 per cent comprised CPF-funded policies.
New health insurance premiums fell 34 per cent to $91 million in the first half of this year. A slowdown in the sales of integrated shield plans was observed as consumers adopted a wait-and-see approach with MediShield Life kicking in on Nov 1.
Growth this year, compared with last year's, is expected to be stable.
The LIA sees more pick-up in integrated hospitalisation plans as people gain clarity on the benefits provided by MediShield Life and seek higher health coverage and additional benefits.
Meanwhile, insurers are holding training sessions for their tied agents and advisers from financial advisory firms who work with them to promote their products, in preparation for the launch of MediShield Life in November.
The LIA added that the existing examination module for health insurance will be enhanced to include the MediShield Life and integrated plan framework and regulatory requirements.