From April 7, consumers will be able to directly purchase insurance – like lifetime financial protection – from a provider, according to a new rule introduced by the Monetary Authority of Singapore (MAS).
As well as the introduction of direct purchase insurance (DPI), the MAS has helped build an interactive web portal called comparefirst.sg which allows consumers to easily compare insurance products sold by different life companies.
Both initiatives have been introduced under Singapore’s Financial Advisory Industry Review (FAIR), which aims to stamp out unfairness in the city-state’s financial industry through amendments to the Financial Advisers Act and Insurance Act.
Premiums underlining direct purchase insurance – which can be identified by the word “direct” in their product names – are lower than comparable life insurance products because no commissions are charged. MAS said these products will be easier for consumers to understand and come equipped with a factsheet and a checklist.
“Natural progression”
Tim Searle, chairman of Singapore-based financial advisory firm Globaleye, said his advisers are ensuring their clients are aware of this facility, but that Globaleye clients who have more complex requirements when compared to the mass market would “prefer to seek specialist advice and solutions that transactional type platforms cannot support”.
He said the DPI initiative is a natural progression of things. “The baby boomer money is going to start to dry up and the generation who welcomed a sit down over a cup of coffee with their financial adviser will diminish.
“The new generation is going to need a new approach that comes with a cost benefit, and online platforms will feature heavily in that offering.
