Is it Better to Get Insurance Policies in Singapore from One Company or Several?

policies in Singapore

One important money rule is not putting all your money in one place, which means spreading it out to reduce risk. This is called diversification. But what about insurance policies in Singapore? Is it smart to have different insurance policies from different companies?

Many people have different insurance plans for different things. For example, one for death coverage, another for critical illness, and maybe even one for accidents. If you have an insurance agent, they usually work with just one company, so all your policies are from that company.

So, should you spread out your insurance policies in Singapore and get them from different companies?

Finding the Best Value in the Market

All insurance firms charge different prices for the same policy, although the reality is that they all offer similar services. 

Annual Premium (S$):
Tokio Marine
Great Eastern Life
Age/Credit Rating
A – (Fitch)
A (Fitch)
A+ (S & P)
AA – (S & P)
AA – (S & P)
AA – (S & P)
AA – (S & P)
A + (S & P)
AA – (S & P)

Referring to the above comparison table for Term Life insurance, we find that for a 30-year-old man insuring himself for $1,000,000 until age 65, Singlife charges $568 yearly, while AIA charges $882, which is $314 more.

However, if the man were 40 and buying a 25-year policy for the same amount, FWD would be the cheapest, 2% less than Singlife and 35.4% less than AIA.

But, cheaper doesn’t always mean better. A policy with a higher premium might offer extra benefits like Total and Permanent Disability cover, which could justify the higher cost. These extras might be available as add-ons with other insurers. Without checking each policy’s details, it’s hard to know how similar or different they are.

policies in Singapore

Improved Protection for Sickness

While insurance policies may seem similar, each one is unique, especially when it comes to critical illness coverage.

The Life Insurance Association of Singapore (LIA) has a framework for Critical Illness (CI) that was last updated in 2020. This framework sets standards for 37 main Critical Illness benefits.

For these 37 CI benefits, all insurers in Singapore use the same definitions and will pay out a claim if you’re diagnosed with any of these conditions.

However, coverage for CI benefits beyond these 37 illnesses may vary. Some policies cover over 100 types of critical illnesses at different stages. When buying a more complex product like a multi-pay critical illness policy, it’s helpful to compare offerings from different insurers to get the most comprehensive coverage. But more coverage doesn’t always mean better. It’s important to carefully review the payout clauses of each policy.

Claiming with More Than One Insurance Company

When you need to make claims yourself, like for a personal accident plan or hospital coverage, it’s manageable. But if something happens to you, and it’s up to your family or beneficiaries to claim, things can get complicated.

If all your insurance is with one company, it’s easy for them to claim from all your policies at once. But if you have policies in Singapore with different companies, it’s a hassle. Even organized people can struggle to handle multiple claims.

People often forget what policies they have, what they cover, and which companies they’re with. Imagine your family trying to figure it out after you’re gone. They might have to call each company just to see if you had a policy with them, let alone understand what it covers and if they can claim.

This might seem like just paperwork, but it’s important because it’s when your insurance is actually needed.

Dealing with Several Agents

When you buy policies from different insurance companies, you might need to deal with several insurance agents. These agents usually want you to buy all your policies from them and the company they work for.

Another issue is that many agents don’t stay in their jobs forever. They might switch to another company, making things more complicated.

So, it’s still a good idea to spread out your insurance policies in Singapore. By working with multiple agents you trust and having policies from different companies, you have more choices to find the best coverage for you.

Before you go, do check out our other article as well!

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