Do you recall your first roller-coaster ride or your first visit to the dentist?
You were filled with trepidation as you did not know what to expect.
However once you had experienced it, the fear sensation went away quickly.
Clearly, one of the reasons for fear is due to the lack of knowledge.
For the maiden post of 2016, I am going to discuss about the unconscious fear of the general public towards life insurance.
We all know how education in Singapore has been conducted.
Test, examinations and doing past years papers are the modus operandi.
There is always a right answer in the model question.
MOE and the schools have taken care to make sure to avoid ambiguity so that it will attract less parental complaints and ease the marking of papers by the teachers.
This system has certainly created some good scientific minds in our nation.
At the same time, we grew up thinking that there must be a model solution to every question in life.
Hey, if the answer comes from an authority, it must be confirm plus guarantee chop, correct.
Here cometh the problem.
You know this thing about finance planning.
It does not have a model answer – it is part science, part art and topped up with some common sense.
When faced with such conundrum, people turn to what they know best.
Oh no, there are no 10 year series on financial planning.
Without the model answer, people starts to develop a fear about financial planning due to the lack of definitive solution.
People do not like to live with fear.
Some of you decide to overcome this fear by educating yourself with books, papers and financial education blogs.
However, due to an old habit from their young schooling days, a number of people listen to the authoritative voice of the government.
Instead of MOE-certified teachers, they seek the advice from the MAS-approved financial advisory representatives.
Actually that is not a bad thing.
Financial advisers are trained to provide you their expert viewpoints on your finances.
Investment products may be complex and perhaps you need a second opinion on it.
However, just like teachers, they should be there to enlighten you and to guide you on the topic.
You are expected to answer the exam questions on your own and likewise, you are personally responsible for your own financial well-being.
Too many people do not evaluate their financial decision themselves and instead, outsource the process of thinking to their advisors.
How would I know if the people who bought the products did not decide on their own?
From my personal working experience, many policyholders had enquired about what coverage that their policies were providing.
Hell, I even had Financial Advisers asking me of the same but that is a story for another day.
If you hate anecdotal experiences, the sobering fact that Singaporeans being underinsured will prove the same point as nobody will deliberately under-insure himself.
Thus, my point is that while MAS is trying to protect the consumers by licensing the advisors, it has also created some unintended downsides:
(1) Only certified financial advisors are capable to deciding what is best for you
(2) By having required training for financial advisors, an impression is formed that financial literacy is hard to achieve.
Admittedly, some financial instruments are hard to understand so we are in no way, downplaying the role of financial advisers.
However life insurance does not fall into this category.
Life insurance can be easy to learn.
We have the best minds in the world and MAS does not trust that we are able to understand life insurance on our own.
Come on, have some faith in Singaporeans!
Still having doubts? Give this a go and judge for yourselves.
MAS is the culprit then, uh?
None, we really do not believe in the blame game.
In addition, by introducing Direct Purchase Product, MAS is taking a right step towards demystifying that life insurance is a complicated matter.
It also allows one to buy insurance without a financial adviser, thus making oneself personally responsible.
With the modern internet era, finding insurance information is as easy as ABC so you have no excuse to be fearful or disengaged financially.
Basically I just want to say:
A) it is just insurance, not rocket science.
B) You can take personal responsibility for your life insurance planning
Personally, this is also my New Year Resolution for 2016.
Through ClearlySurely.com, I hope that more and more people will be able to dissolve their fear by learning, comparing and discussing insurance with us.
Like and share this with your friends if you concur.
Lastly, we wish you a great year ahead.
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.