What to Watch Out For Before Buying Insurance


Insurance is one of the most critical yet often neglected parts of financial planning. Although its feared reputation as a double-edged sword is well-earned due to reckless misrepresentation and concealment of information from customers, it does not mean there is a viable alternative to it. However, it never hurts to educate yourself and exercise some vigilance while making your investment decisions and help you avoid becoming a part of the insurance horror stories you hear about from other people.

Insurance must ideally be purchased when you are young and at the peak of your health, because the premiums you pay will be a lot more affordable than the ones older people with numerous health conditions are liable to pay.

What to Look Out For While Dealing With Insurance Agents

In Singapore, you are likely to encounter the following 3 types of agents with specific qualifications while scouring for insurance schemes:

1. Agents representing insurance companies

2. Agents representing a bank

3. Independent Financial Advisers


What they mean

M5, M9, and HI

Mandatory for all insurance agents


Only necessary for bankers or agents who plan on selling unit trusts

BCP, PGI and ComGI

Mandatory for agents commissioned to sell general insurance in Singapore

An insurance agent who holds all these credentials in his resume has an all-access pass to the entire suite of products available in the insurance spectrum. On the other hand, an agent who doles out any investment or insurance-related advice that supersedes his qualifications is doling out nothing but unsolicited advice. Insurance agents are always briefed by their compliance team to not give specific advice for products unless they have earned the necessary qualifications; hence, you must be wary of any smooth-talking insurance agent breaking these protocols and steer away from them.

Expertise in investment entails a plethora of financial insights and data including estimated P/E, style of investment, upside potential, investment volatility, asset allocation, dollar cost averaging, etc. Only an experienced and reputed insurance agent will have the credibility to dispense useful advice on matters like Investment Linked Products.

Before you agree to do business with them, it is recommended to conduct a brief background check of the insurance agent you are holding preliminary talks with in order to verify their credentials. You can do this by checking his license, investigating the company they represent and asking about their work history. Once you are satisfied, you can ask the agent to go ahead with a full presentation of the insurance product you are interested in.

Rigorously Review Your Policy Documents

Every insurance companies grants a 14-day free look period to customers that commences from the date of receipt of their policy document in order for them to properly review their documents and see if it meets all their requirements. If it fails to do so, customers are free to send a company written notice of cancellation and your insurance policy will promptly be terminated and you will get the right refund meant for you.

Supplement Your Insurance Coverage

Most people make the mistake of assuming there is a universal insurance policy that will safeguard them from all kinds of issues related to the type of policy they own. As a result, many customers get taken for a ride when they find out that their insurance policy is bound by certain limitations that cannot help you with the problem you are stuck with. Therefore, adding supplementary coverage to your insurance policy is highly recommended as it does not cost much and it can reinforce your protection to the point of making it completely bulletproof. Here are some of the fine supplementary benefits you can gain by taking advantage of such schemes:

  • Disability waiver of premium –permits you to avoid paying premiums for a policy in case you are afflicted with a severe disability for a long period of time.

  • Accidental death benefit – gives you bonus benefits in case you die as a result of an accident.

  • Family income stream – ensures that your family will carry on getting your monthly earnings in case you suffer a premature demise.

 Pick a Renewable Insurance plan

An insurance plan with a guaranteed renewal policy is one of the best assets to have on your side as it allows you to alter premium rates, benefits, and other terms and conditions when the time for policy renewal arises. As long as your premiums are paid on time, you can capitalize on this financial flexibility and give you better returns for your investment.

For more financial tips and tricks to optimize your lifestyle, visit imoney.sg and make all the right moves you wish to make with your money.

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