The past few years have seen the rise of group insurance in Singapore. The interest that consumers show towards group insurance has made it one of the most profitable businesses in Singapore’s insurance sector.
What is group insurance in Singapore?
Group insurance, also known as collective or bulk purchasing, enables a higher number of people to avail themselves of the same kind of insurance coverage for a lower premium. The savings are made possible by the decrease in administrative costs that results from group buying.
The major types of group insurance are life, health, home, auto and travel insurances.
Advantages of group insurance in Singapore
There are many reasons why consumers opt for group insurance plans:
Disadvantages of Group Insurance?There are some difficulties experienced by consumers who purchase group insurance in Singapore plans, although these can be easily overcome. The main disadvantages are:
– Not all insurers offer the same kind of package. Consumers should compare various packages to find out which insurer provides the best terms and conditions.
– Consumers do not have the option to change insurers after they have purchased a group insurance policy. This is due to the fact that insurers are unwilling to refund premiums paid by their clients should they choose to switch companies.
– Many insurance plans require exclusions for pre-existing medical conditions. There are providers who waive this requirement. Make sure to review your insurer’s list of exclusions and choose a provider that offers the least number of exclusions.
– Group insurance is not for individual consumers; it is purchased by businesses or associations on behalf of their employees/members.
– There may be some cases when the coverage provided by group insurance plans might be less than what is required by the consumer. This can be checked by speaking to an agent or reading through the terms and conditions of the plan.
– The insurance offered by group insurance plans might not be valid if your employer changes insurers during your contract period; this could result in you losing any benefits accrued under your policy.
– Group insurance policies might not be suitable for people who are employed on temporary contracts.
– The duration of the plan purchased by your employer might not coincide with your own preferred insurance period. You might lose coverage if you leave your job or if your contract is not renewed before the end of the term period.
– Group insurance plans do not cover accidents that occur while traveling to and from work.
– Opting for group insurance plans is not a good idea if you are in the business of selling insurance products, such as an agent or broker. This is because your clients would be able to take advantage of lower premiums by availing themselves of group insurance plan discounts.
The advantages that group insurance offers far outweigh the disadvantages. By availing themselves of group insurance plans, consumers are able to enjoy lower premiums while also increasing the amount of coverage that they receive. Group buying enables businesses and associations to negotiate better terms with insurers which results in more competitive premium rates being offered.
To learn more about group insurance, contact an agent or read through the Frequently Asked Questions section on any insurance company’s website.
