Financial Advisory Process


Where do you get advice on health insurance?

Health insurance can be obtained in several ways.

You can:

  • Visit an office of an insurance company or meet its agents ; or
  • Contact a representative from a financial adviser firm and check if he or she i) is acting as agent for an insurance company or ii) is a broking staff of an insurance broking firm; or
  • Approach a broking staff from an insurance broking firm directly

Make sure the entity you are dealing with is authorised by MAS. MAS’ regulations require financial institutions and entities which act as their intermediaries to disclose product information clearly when they offer life, accident and health insurance policies. Intermediaries are also required to have a reasonable basis for such insurance products that they recommend to you.

Look up the Financial Institutions Directory on the Monetary Authority of Singapore (MAS)’ website to see if the insurance company you intend to deal with is a regulated entity in Singapore and also to view the activities it is authorised to conduct in Singapore. MAS only regulates entities with a presence in Singapore.

Find out more about the individual you are dealing with.

a) For life insurance policies, ask for his / her unique representative number and check the MAS Register of Representatives on the MAS website to find out if he / she is authorised to provide financial advice or arrange life policies under the Financial Advisers Act (FAA). All representatives of insurance companies and any other financial institutions who conduct FAA activities will have a Financial Advisers representative number if they are authorised to conduct Financial Advisory activities under the FAA.

b) For general insurance products, ask for his or her nominee number. General insurance products may be sold by Agents Registration Board (ARB) -registered general insurance agents or broking staff of registered or exempt insurance brokers. The ARB is part of the General Insurance Association (GIA) of Singapore. After you obtain the agent’s nominee number, you can check the ARB website to verify if the individual is authorised to sell general insurance products.

General insurance agents are required to be registered with ARB and be equipped with minimum qualifications. They are also required to fulfil GIA’s Fit and Proper Criteria, which is adapted from MAS’ Fit and Proper Criteria.

What is the sales process /Financial Needs Analysis?

When you are buying health insurance, you will be asked to complete a Know-Your-Customer or fact-find form, to provide your financial adviser representative, insurance agent or the broking staff from a registered or exempt insurance broker, with the necessary information for him to identify your objectives, protection needs and what you can afford. With this information, he will be able to recommend a product which is suitable for you. Do note that the suitability of the recommendation and advice he gives you depends on the completeness of the information you provide. He will explain what the recommended product is and also the basis for his recommendation. You should discuss the recommendation with him and assess if the recommended plan meets your needs. If you are not happy, you may ask him to show you other products. Do not feel compelled to buy the product, even if there is a 14 day free look period.

Do ask him about how he is paid and the level of commission he receives for the different products he recommends.

What are your responsibilities when buying insurance?

Your duty to provide complete information

When you apply for health insurance, you must disclose all information required completely. You will be asked about your age and occupation, and any history of illnesses, medical conditions or disability.

The insurance company will assess this information and decide whether or not to accept your application. If you are not in good health, the insurer may refuse to provide certain benefits, or increase the premium charges, or reject your application.

If you are not sure whether to include certain information, you should provide it anyway, to be on the safe side. When you sign the application form, make sure that the information given to the individual you are dealing with [insurance agent] is included in your application. It is your responsibility to check and ensure that the information is included. If you spot any inaccuracies or missing information, you must ask for the document to be changed immediately. If there is inaccurate or missing information, your policy can be voided and you will not have the protection you need when you want it.  

Tip: Never sign blank forms. Do not release your identity card to someone you do not know or without first clarifying whether it is needed for a valid reason.

 

The above information is prepared in collaboration with the Life Insurance Association of Singapore.