Consumers looking for insurance products online will soon be spoilt for choice, thanks to recent changes to rules relating to the distribution of life insurance policies on the Internet.
Direct life insurers can now offer all types of life policies online with no advice provided. But a range of safeguards are built in, from providing online copies of the product summary and illustrations of the projected benefits, to a product highlights sheet and full policy wordings. These will help safeguard consumers' interests by providing the key information required to make an informed decision and the avenues for lodging queries and claims.
Online insurer FWD Singapore said it had anticipated the need for the life insurance industry in Singapore to keep pace with evolving consumer habits.
FWD chief executive Abhishek Bhatia says: "Much of the complexity that exists in the insurance market today has been created by the industry itself. However, this can and must be removed if the industry wants to meet consumer expectations.
"This is why we believe that life insurance needn't be sold face to face through a middleman, but direct and online to provide Singaporeans with better cost savings and convenience at the same time."
An FWD survey of 600 people last year found that 90 per cent of consumers are comfortable with buying policies online.
FWD noted that the high mobile and Internet penetration here and increased broadband availability will lead to more people buying insurance online - as long as insurers can simplify the process of purchasing and making claims.
The Sunday Times highlights two new savings plans available online.
ENDOWMENT PLAN BY FWD INSURANCE
Introduced earlier this month, FWD's three-year endowment plan offers a guaranteed interest rate of 2.02 per cent a year. The minimum single premium of $1,000 widens the accessibility of the product if you want to invest smaller amounts.
FWD says this is the highest guaranteed return among three-year endowment plans on the market.
It added that most endowment plans have been sold through financial advisers and banks, but now they can be bought online with a few simple clicks of a mouse.
"At FWD, we are pushing the boundaries of digitalisation to help more consumers better manage their savings and protection needs," says Mr Bhatia.
"We believe that Singaporeans are increasingly looking for the self-control, convenience and 24/7 availability.... By removing the intermediaries, we are able remove commissions and pass these financial benefits back to our customers."
The maximum single premium is $15,000 and the capital is guaranteed upon the plan's maturity. It can be bought by anyone between 18 and 70 and is available online while stocks last at www.fwd.com.sg.
eEASY SAVEPRO BY ETIQA INSURANCE
Etiqa Insurance, which is part of the Maybank group, recently rolled out eEASY savepro, which offers 100 per cent capital guarantee upon maturity and a projected return (non-guaranteed) of up to 4.02 per cent a year - the highest for an online participating insurance savings plan that the firm offers.
The plan is part of the EASY save series, which is tailored to a customer's risk appetite, savings horizon and aspirations. Customers can choose a participating or non-participating plan, premium size, premium term and policy term based on their preferences.
Participating policies provide both guaranteed and non-guaranteed benefits, for example, in the form of bonuses.
Non-participating policies provide guaranteed benefits only. The guaranteed interest rate is 2.02 per cent a year for Etiqa's plan, which means a capital guarantee of 112 per cent upon maturity after the six-year policy term. Premiums for this plan are payable over two years.
Ms Shirley Tan, head of customer experience and propositions at Etiqa, says the projected return of up to 4.02 per cent for the participating plan at 100 per cent capital guarantee upon maturity is only possible by adopting the direct and online business model. This turns commission fees - a standard offline distribution cost - into better returns for customers.
In addition, customers who buy any plan from the EASY save series can benefit from complimentary accidental death protection booster, which provides extra accidental death protection at 100 per cent of total premiums paid. This will be on top of the death benefit, which is 105 per cent of total premiums paid.
Etiqa customers are allowed to make a first payment of $1 upfront via debit card or credit card when they make the online purchase. The remaining first-year premium can be paid within the next 14 days (free look period). This benefit allows customers to enjoy coverage of the policy from the day of the online purchase with just a small initial payment amount.
The minimum first-year premium sizes for eEASY save (non-participating plan) range from $10,000 to $100,000. The second-year premium is half of the first-year premium amount. For eEASY savepro (participating plan), customers may choose their preferred annual/single premium amount ranging from $5,000 to $100,000.