We are about to reveal a profound truth.
You might want to sit down for this, and take a deep breath to steady your nerves.
To be Singaporean is to compare.
We compare literally everything: Our PSLE scores, our salary, the age of our cars, the p.s.f price of our homes, what model of handphone we have upgraded to, ad nauseam. (Latin for…. Compare until cannot compare any more. Then compare some more)
To that I say, no choice lah. It is the environment we are in that makes us kiasu. And in our more honest moments, we just want to get ahead of the guy next door. Nothing quite wrong with that, as long as we don’t take it overboard.
When applied to the realm of insurance, this practice of comparison is even more apparent. For one, price comparison sites have sprung up like mushrooms.
Insurers are falling over themselves to create an FA distribution channels, which (ostensibly) offer greater choice for their clients, since they offer products from multiple companies. (We discuss their efficacy in another article!)
Since the primary objective of comparison is to get a better deal, let us examine at how much of a better deal we can get, when we compare various insurances. To us, a better deal does not only mean a better price, but overall better value.
Case Study 1: Travel Insurance
Scenario: We input a single trip to Japan for 10 days.
Comparison Site used: Gobear
Methodology: We sorted out the plans based on Coverage score (Gobear’s own rating for each plan), and compared the first 8 plans in the results.
Here is a summary table of our findings (all 8 plans are offered by 8 different insurers):
Now here’s an interesting question. Which one would you have chosen, all things being equal? Would a higher priced plan give better cover than a lower priced one? Would the extra cover be worth the higher cost?
The trick here (according to us), is relativity. What is missing here is the value per dollar premium spent – which then makes it easier to choose (assuming we are all suckers for value).
Here is a table of relative value as calculated by us (Coverage Score over Premium Cost):
The higher the score, the better the value.
And so we have a clear winner. Incidentally Plan C is the lowest priced among all 8 plans.
Comparing the best valued plan vs the worst valued plan, a traveler to Japan could have saved up to $88, or 188% the price of Plan C itself.
Pretty much worth the time it took do up the comparison, if you ask me.
Case Study 2: Motor Insurance
Scenario: Our 2015 Honda Vezel needs cover! 50% NCD.
Comparison Site used: Gobear
(We wanted to try out moneysmart, but they made us jump through all the hoops and collected all manner of personal info… and yet resulted in a shitty comparison.)
Methodology: Again, we sorted out the top 8 plans we found based on their ranking system.
For one, motor insurance prices seem more homogeneous compared to travel plans. If we disregard the last 2 plans, which have optional components in their coverage (thus not making comparison with others equal), then the price variation is 28%. I.e. The most expensive plan is 28% more expensive than the cheapest plan.
Again, without relativity it is hard to make an objective comparison. Here are the value scores of each plan:
Plan A is the winner when it comes to value. But it has one of the highest prices among the 8 – would it be prudent to choose it?
Personally, I would, because in comparison with Plan E (which is 7 dollars more expensive), Plan A beats it in all aspects except for towing fee coverage (both are tied).
So the price savings in this case is negligible, but I would have gotten my excess lowered by $100, increased my personal accident cover by 50K, enjoyed 4K more cover in medical expenses, and gain $30 more per day without use of my vehicle.
Well worth my time to do the comparison!
Case Study 3: Term Insurance
Scenario: A male aged 35, seeking Death, TPD and CI cover till age 65 for 400k
Comparison Site used: Clearly Surely (of course!)
Methodology: Clearly Surely (that’s us!) already has a ranking system by which plans are sorted out by value. In this case, it is the Sum Assured amount vs Annual Premiums.
HOLY COW. Barely any discernible difference between the plans, and yet the difference between the cheapest and most expensive one is $585 PER YEAR. That is a price difference of over 32%!
Over a person’s life time, that additional premium translates to over $17,500 – enough to buy me 17 years of motor insurance, or 365 travel insurances!
Verdict: To Compare is to help yourself
If you never have compared insurance prices before, perhaps you might start after this article. There are clear and distinct advantages in price or value that are apparent when you start comparing.
No doubt there will always be non-tangible factors that may affect your final decision, but it will not hurt to scout around for more information.
End of the day, we compare because it allows us to make an informed decision and get a better deal.
Speaking of better deals…
Here is a shout out to our new found friend, ezbuy.sg
They are a site dedicated to online shopping and helping people suss out the best deals online – even from Taobao and other online shopping platforms!
Come November 11 (aka 11.11), there will be some crazy deals, with up to 90% discounts in some cases.
If you are a new user, sign up on their platform and get a $10 shopping voucher for your efforts. Check them out, and have a blast!
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.
We also won’t say no to a good deal when we see one.