Singapore reports low sales of commission-free life policies

Added 21st September 2016

The number of people buying life insurance policies without commissions or financial advice in Singapore has been low since the product’s launch in April last year.

Singapore reports low sales of commission-free life policies

According to figures published by Singapore’s Life Insurance Association (LIA) only 435 direct purchase insurance (DPI) policies - as they are known – were sold in the six months to 30 June 2016.

This accounted for just $371,000 (£284,444, €332,184) of weighted new premiums out of $1.52bn for the whole industry for the first half of 2016.

The LIA revealed that 95% of new DPI sales comprised regular-premium term life policies, while the rest were whole life plans.

Overall, since its launch in April last year, just 1,081 DPI policies have been bought, working out to around 200 sales every quarter.

DPI products are term life and whole life insurance policies with total and permanent disability cover, as well as optional critical illness clauses attached.

They can be bought from insurers' customer service centres and appear on local price comparison website hosting a range of insurers.

However, consumers can only insure themselves for up to $400,000 - with a maximum coverage of $200,000 for whole-life direct purchase insurance - with each insurer, based on estimated average protection needs.

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