People here have not held back on buying insurance despite higher living costs and an uncertain job market over the past year.
The take-up for new policies remained robust in the third quarter, with annual premium policies rising 9.8% from the second quarter to $886.9 million, according to Life Insurance Association of Singapore data.
Take-ups rose by nearly 25% from January to September 2023, compared with the same period in 2022, reaching $2.4 billion in total, the highest in five years and surpassing even the COVID-19 period.
Major insurance providers here, including Prudential, Income Insurance, Manulife and Singlife, have said that they have seen few or no cases of policyholders opting to postpone or take a break from paying their premiums.
A Singlife spokesman added that there has been “a general downtrend” in the number of policyholders on a premium holiday after the pandemic.
Mr Derrick Yip, Vice-President of public relations at the Insurance and Financial Practitioners Association of Singapore (Ifpas), said financial planning has to be done well right from the start, so clients do not find themselves in a situation where they cannot cope with premium payments. Ifpas is the non-profit association for financial services and insurance practitioners.
Consultants carry out a financial needs analysis with clients to help them work out a manageable insurance plan. This asks what a person’s financial needs are, if they can afford the premiums for the next 10 years, and whether they expect any changes in their financial situation in the next one to two years. New house? Kids? Or other family demands that make it difficult for them to service their premiums? Are they expecting to change jobs or make a career switch?
The consultants will then work with clients to come up with a comfortable premium amount that they think they can afford, Mr Yip said, noting that if clients cannot cope with the premiums, they will be forced to give up the policy.
Financial experts advised anyone who is facing financial difficulties and considering cancelling an insurance policy to think twice.
Mr Yip said: “Do not terminate your plan. If you terminate, it means your wealth accumulation and protection coverage will be affected.”
He added that there are various options available to help financially strained policyholders get through their difficulties. These include takings a premium holiday, an automatic premium loan for future payments or deferring premium payments to a later date.
He added that there are various options available to help financially strained policyholders get through their difficulties. These include taking a premium holiday, an automatic premium loan for future payments or deferring premium payments to a later date, reported The Straits Times.