My thoughts on some of the topics mentioned:
- Annual premium products - as an aside, where possible I always advise clients to pay their life insurance or insurance savings plans by annual mode. Compared to monthly mode payment, the discount offered by annual mode is equivalent to 40-80 times your normal bank savings rate of 0.05%. In other words, keeping 11 months' of your premium in the bank, will lose you 40-80 times compared to paying all 12 months upfront.
- MediShield Life - though welcome, especially for those already uninsurable; I doubt that it is practicable for it to be structured to be as comprehensive as private integrated shield plans. At the least, there will still be a preference and demand for private hospital insurance coverage. For myself, I am covered under the private hospital category not for comfort and frills, but rather quick response in emergencies and access to additional expertise.
- Consumers comparing products themselves and buying direct- having moved to an independent financial advisory platform since 2012, I have experienced firsthand the challenge, tediousness, and insider knowledge needed to do a good comparison. It is not just about price and features. There are many aspects to consider, depending on the kind of financial product one is getting. From benefits, to definitions, to claims experience, to bonus records, to how exactly the plan works and fits into one's portfolio (apart from what you see in the marketing material), etc etc. Unless one is actively practising in the industry himself, is familiar, is current, and has lots of time, this is best left to the professionals who do it on a full-time basis. For the consumers, their time is better spent on their own work to bring in a higher income.
- Fee advisory- with the availability of consultants who are representatives of Independent Financial Advisers (IFAs) who look into the client's best interest and have special access to providers in the market, consumers can avoid making costly mistakes such as purchasing the wrong products for their financial goals and portfolio. The consultant discusses with the client on his objectives, finds out client's current situation, and spends a lot of time researching, planning and customising the plan and financial products to move client towards his chosen financial success. That is the fee advice that clients pay for. Even if consumers can buy direct from insurers in future, it is still worth it to pay someone else to dig through all the jargon and ensure you implement the right financial products. Yes, 20-30 years ago, there were only insurance agents, whose jobs were to push specific financial products. Now, this approach will no longer do, as people realise it can get quite messy and confusing, buying financial products piecemeal, without ensuring their fit first. Financial plans are also usually a long-term and 'with cost' commitment. All the more one needs to give due attention to their financial planning.
It starts with discussion and unbiased advice.
This was first posted on 13Feb14, updated 31Aug21