SINGAPORE - The Life Insurance Association (LIA) has launched a digital calculator to help consumers better understand their financial protection needs and take steps to narrow gaps in their insurance coverage.
The calculator, which has been used close to 500 times since its soft launch in October, "allows consumers to find out their approximate protection needs and gaps starting with just seven simple questions", said LIA on Friday (Nov 8).
It generates a report that gives users an overview of their insurance coverage gaps, a detailed breakdown of their protection needs, and a summary of their financial resources.
This includes information on cost of estimated expenses needed upon death and/or diagnosis of a critical illness (CI).
Users first have to complete one or up to four sections of a questionnaire, depending on how accurate they want their results to be. The questionnaire covers information about the user, the user's family, financial obligations and resources.
"We tend to underestimate the probability of unfortunate events such as death and critical illness, and put off getting adequate protection until it is too late," said Khor Hock Seng, president of LIA Singapore.
"By presenting this personalised gap in tangible numbers produced by an industry-calibrated calculator, we seek to encourage consumers to be proactive in ensuring that they and their loved ones are well-protected."
The initiative underpins ongoing efforts to bridge Singapore's 20 per cent mortality and 80 per cent CI protection gaps, LIA said.
Its 2017 Protection Gap Study showed Singapore has a national mortality and CI protection gap of S$893 billion, which equates to about S$169,673 mortality protection gap and S$256,826 CI protection gap per economically active adult.
A follow-up qualitative study by LIA attributed the gaps to perception barriers such as seeing insurance premium payments as a loss rather than a gain, and financial over-confidence where individuals believe that they are financially savvy.
LIA on Thursday revealed industry figures for the first nine months of 2019, which showed that market volatility and Singapore's subdued economic growth had weighed on insurance sales.
Singapore's life insurance industry saw new business, in terms of total weighted premiums, drop 4 per cent to S$3 billion for January to September, compared to the year-ago period.