Consumer Survey on Life Insurance Prepared for: Prepared by:
What are we trying to achieve? To ascertain consumers’ knowledge, perceptions and attitudes on insurance protection.
How did we do this? A quantitative survey was conducted amongst N=400 Singaporeans, aged 18-62. • Sample was quota controlled on gender, age, ethnicity, house type and income to ensure that it is representative of the population. • Interviews were done face-to-face in the homes of respondents using a structured questionnaire.
Two-thirds of Singaporeans have some form of insurance. Conversely, 3 in 10 do not have any. A lot of room for growth still. Owners [N=259] Non-Owners [N=115] Lapsed Owners [N=26*] Ownersare defined as those who currently own any policy Non-ownersare defined as do not own any policy Lapsed ownersare defined as those who currently do not have any and cancelled policies before
Insurance owners (65% of population)
Amongst those who have personal insurance, 46% think they are sufficiently covered by their existing policies. Question: Using a scale of 1 to 5 where 5 means “Definitely well-covered” and 1 means “Definitely not well-covered”, please tell me how well do you think you are covered? Base: Among insurance owners (N=259) [N=26*] Definitely well-covered Probably well-covered May or may not be well-covered Probably not well-covered Definitely not well-covered [N=115] Well-covered 46% [N=259] Not well-covered 54% WELL- COVERED 46% NOT WELL- COVERED 54% N=120 N=138
Those who think they are well-covered show little interest in buying more insurance. Even amongst those who do not think they are well-covered, only 3 in 10 is considering buying in the future. [N=26*] [N=115] [N=259] PLANS TO BUY 30% PLANS TO BUY 19% WELL- COVERED 46% NOT WELL- COVERED 54% NO PLANS TO BUY 70% NO PLANS TO BUY 81% N=120 N=138
Intention to buy in the future amongst non-owners is quite encouraging at 27%. [N=26*] PLANS TO BUY 15% PLANS TO BUY 27% NO PLANS TO BUY 85% NO PLANS TO BUY 73% [N=115] [N=259] PLANS TO BUY 30% PLANS TO BUY 19% WELL- COVERED 46% NOT WELL- COVERED 53% NO PLANS TO BUY 70% NO PLANS TO BUY 81% N=120 N=138
On average, insurance owners are covered for between 80-100k. Those who think they are well covered averages 100-200k in coverage. Question: Now, thinking of all the personal insurance policies you currently have, how much in total are you covered for death cover only? Base: Among insurance owners (N=259) Definitely well-covered Probably well-covered May or may not be well-covered Probably not well-covered Definitely not well-covered Well-covered 46% Not well-covered 54%
About a quarter of insurance owners also do not know how much they are covered. Question: Now, thinking of all the personal insurance policies you currently have, how much in total are you covered for death cover only? Base: Among insurance owners (N=259) Definitely well-covered Probably well-covered May or may not be well-covered Probably not well-covered Definitely not well-covered Well-covered 46% Not well-covered 54%
The amount of coverage is felt to be sufficient for only 4-7 years. Those who are well covered are a bit more positive, thinking they have enough to last 8-10 years. Question: How long do you think the death cover amount will cover your family/ beneficiaries? Base: Among insurance owners (N=259) Definitely well-covered Probably well-covered May or may not be well-covered Probably not well-covered Definitely not well-covered Well-covered 46% Not well-covered 54%
When consumers think about how much coverage is sufficient for their family, they do not have clear parameters for determining what amount will be sufficient. Most of them take into consideration household expenses BUT they are unsure if this is a good gauge because they reason that their family will likely adjust their lifestyle depending on the household income. “My family will not live so lavishly anymore should anything happen to me.” – Female, life insurance owner Qualitative Insight:There is a lack of knowledge about what is sufficient.
Agents give the impression that they will always tell a customer that their coverage is probably not enough. They will reason out and calculate a “bloated” figure (like 10 times one’s annual income). “Who has that amount of money – 10 times your annual income?!” ~ Female life insurance owner Qualitative Insight:Consumers are regularly reminded by agents that they are not covered sufficiently. However, sufficiency is considered by some to be quite unattainable.
Non-owners (29% of population)
Cost is a key concern for non-owners. Question: What are the reasons why you do not own any insurance (besides those bought by your employer)? Base: Amongst non-owners (115) % It's too expensive Insurance is not important, no reason to get it It's not necessary or worth doing It's too hard to understand/confusing I don't trust insurance companies It's too much hassle to get It's not worth of good value CPF is sufficient to cover me Insurance is not worth investing I am well-covered by my Employer Don't know
Only about a quarter claim to have plans to buy. Cost is again cited as the key deterrent. Question: Using a scale of 1 to 5 where 5 means “Definitely have plans to buy” and 1 means “Definitely have no plans to buy”, please tell me if you have any plans to get insurance? Question: What are the reasons why you have no plans of buying insurance? Base: Amongst non-owners (115) Definitely have plans to buy Probably have plans to buy May/May not have plans to buy Probably have no plans to buy Definitely have no plans to buy 27% 73%
Money is Never Enough A real barrier why many have not bought or do not plan to buy life insurance again is that they say they “simply have no money for it”. They have financial commitments such as housing, car, and credit card loans which need to be paid along with their daily expenses. Because of this, there is no urgent need to buy a life insurance policy. Next to these “more urgent” necessities, a life insurance is seen to be less important and less urgent. While they understand that life insurance is important, they see it as something that can wait – when they are financially better off. Qualitative Insight:Money is definitely a key concern for non-owners of insurance currently.
Determining how much money they can set aside for their monthly premium is a big hurdle that many need to overcome. Many of them say that, at most, they can commit $100-200 monthly or 10-20% of their monthly income. Perhaps there is a need to break-down the premiums in bite-size pieces (i.e. How much do they need to set aside per day? How many chicken rice meals is that equivalent to?) to help allay fears and apprehensions about insurance premiums. Qualitative Insight:Another deterrent we saw in the interviews is that of a lack of understanding of how much is required.
Life Insurance is “Anti-Joy” The resistance against life insurance stems from the attitude among some that money needs to be enjoyed. Many say they want to enjoy life and their earnings when asked why they have no plans to buy (more) life insurance. The idea of scrimping so much on their finances (by including life insurance in their long list of expenses) turns off many respondents, especially because this is probably money they will never see in their lifetime. They see life insurance as a pain! They have no clear appreciation of the benefits that life insurance offers and why these benefits can only be reaped over the long term. Qualitative Insight:Insurance is a grudge purchase.
Qualitative Insight:There is also a perceived lack of tangibles in buying insurance. “ “Every month, you pay such a big amount then at 60 or 70 years old, you pass away. What do you see? You see nothing!” – Male, Insurance Non-Owner “I do not see the actual picture how insurance is going to help because you are talking about monthly contributions and then these contributions are quite big, depends on how much you want at the end of the day. So sometimes I do the calculations whether it is worth that amount… then it just goes away. I forget about it.” – Male, Insurance Non-Owner ”
Qualitative Insight:There is also a perceive lack of tangibles in buying insurance. (cont’d) “ “Insurance is not something tangible. You cannot go out and say, ‘Hey, I got 6 policies. I’m covered for 12 times my annual income.’ Nobody will be impressed. But if you have a fancy car, the flash factor is there. I think that’s important.” – Male, Insurance Owner “If I totally stop wakeboarding and I totally stop clubbing, suddenly I have a few hundred dollars extra a month, and I can put that into buying insurance. So, the point is, do I want to stop it to that extent?” – Male, Insurance Owner “Because I’ve worked hard for the money so I think I’m entitled to spend it the way I like to. Sometimes I do overspend. You like something, you buy it.” – Male, Insurance Non-Owner ”
Cash is King Non-owners of life insurance believe that being cash-rich is more important than having an insurance. By keeping their money in a bank, they reason that they have easy access to it. They cannot rationalise the need to lock-in their funds for a life insurance policy. Their thinking is that: “It’s my money, why don’t I have access to it? Why can’t I take it out if I suddenly need it?” Male, non-insurance owner Qualitative Insight:Other deterrents include consumers thinking they can get around it.
Qualitative Insight:They fall back on cash. “ “If I can, I will save as much as possible. Like $1,000, $2,000. With this amount, I believe it is so much better than insurance. Insurance takes time to claim. But if I say, I’m really gone, next day, (my family) can just go to the bank and withdraw all my money out. Even my CPF they can claim it.” – Female, Insurance, Non-Owner “I’m not a person who believes in insurance. I’m a person who believes in cash. I wouldn’t put insurance as a fallback plan in case anything were to happen to me. What I believe is hard cash. Insurance you still have to go through the claims and stuff whereas cash you can have it any time. Because I do hear stories from my friends about the difficulty of getting claims.” – Male, Insurance Non-Owner ”
Anti-Life Insurance BUT Pro-Investments Some non-owners believe that it is better to put their money in investments rather than life insurance. They feel that getting higher returns for their money is more important than death cover. These customers are clearly investment-savvy and are aware of investment-linked insurance plans. However, their feeling is that returns offered by these plans are not as good as other investment products that they are aware of. Qualitative Insight:However, these people are open to talking about investments.
Qualitative Insight:Investments provide something tangible and more flexible. “ “When you look at insurance, most of the instruments tend to tie you down for a fairly long period of time and I guess it’s not as easy to just switch your investments around as if you were investing in other instruments, that perhaps would have a shorter timeline.” – Female, Insurance Owner “For me, investments are quite straightforward whereas insurance has a lot of plans. You have this and that in your insurance, some have 4 components, others have 3. When you invest, you know where you are investing your money and how much money you are getting. More straightforward.” – Male, Insurance Non-Owner ”
The Relevance of Life Insurance The importance of life insurance is understood amongst all segments, even amongst non-owners of life insurance. They are aware that life insurance is “protection” for their loved ones should anything happen to them. The difference between life insurance owners and non-owners is that owners see it as a more urgent necessity while non-owners do not. Non-owners feel that life insurance is something that can wait. Qualitative Insight:They know they need it. They know the benefits and relevance of life insurance.
Insurance Believers Current life insurance owners are convinced that they made the right decision by buying a life insurance. They believe that non-owners of life insurance are either “arrogant” – they believe they can go on working forever, that nothing bad will happen to them; or, they simply do not have the means to buy a life insurance. The challenge amongst life insurance owners, therefore, is to make them take the next step to ensure they have sufficient coverage. Qualitative Insight:Current life insurance owners tend to believe that insurance is a necessity.
Mis-informed Customers There seems to be so much mis-information about life insurance among both owners and non-owners. What is scary is that there are consumers who are not even aware they have the wrong information and they spread this to others. Qualitative Insight:There is a lot of education to be done still.
Too Much Information There are also those who openly admit that they do not know much about insurance or that there is too much information out there, they are not sure anymore what to believe in. Consumers are confused about life insurance products and are finding it hard to differentiate one product from the next. Qualitative Insight:And then there are the un-informed.
Qualitative Insight:They are yearning for a good product to come along. “ “I have not chanced upon a good insurance policy yet. The knowledge I have now is my past encounter with insurance. I have no idea what the recent developments are in insurance.” –Male, Insurance Owner “I think the only information we get is when we are approached by the sales personnel, that’s the only information they give to us, at the point of sale.” – Female, Insurance Owner “Sometimes you have accident coverage, at the same time you also have savings… I can’t remember so many things within the package and there are so many of them. Sometimes it’s too many for you to remember.” – Male, Insurance Non-Owner ”
Current life insurance owners understand the benefits and importance of life insurance. These messages just need to be reinforced when communicating to them. Teach them financial and protection planning. Most do not know how much coverage they need. Even those who think they are well covered are in fact, very far off the mark. Consider using an investment angle to encourage them to increase their coverage. Educate current life insurance owners
Non-owners of life insurance do not understand the benefits and importance of life insurance. For them, there are more important priorities in life. Benefits and importance need to be further promoted with this group. Educate them by speaking their language. Friendlier advisors will work well in bridging this gap. Correct any misconceptions of life insurance. Address cost concerns. Demonstrate value. Again, consider an investment angle when talking to them. Reach out to non-owners
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