“Insurance is boring. No one likes to talk about it. Most of the time, we only get it because the government requires it for our health or safety or our mortgage company wants to cover its asset.” Here is the thing, even if you’re not […]
We announced our seed fundraising and MAS approval on FinTech Regulatory Sandbox this week. You can read about our press here.
How would we spend our seed funding money?
We’ll continue to invest in helping individuals to understand their insurance coverage and empower you to make an informed decision on your protection needs. On top of that, we are taking a holistic approach and using cutting edge technology to redesign insurance experience. We will continue to improve our product and innovate with the latest technology to help you with your insurance matters as we enter the Monetary Authority of Singapore (MAS)’s FinTech Regulatory Sandbox.
What is a FinTech Regulatory Sandbox?
This is a live environment where financial institutions and FinTech startups can test new products and services.
We know that many of you are not sure of your insurance coverage and only realise the importance of it during times of emergencies. PolicyPal was created to keep you on top of your insurance coverage so you don’t have to wait until it is too late. Believing that transparency is one of the core benefits of simplifying the language around insurance policies, we aim to empower you to understand your protection needs better.
We started in April 2016 with this vision to empower individuals like you to understand and manage all your insurance policies. Insurance is good – for people and communities. But every individual has to deal with messy paperwork and manual processes.
What does it mean to be in the MAS Fintech Sandbox?
As of 2nd March 2017, you can get new insurance policies from NTUC Income and Etiqa Insurance via PolicyPal app. For a start, you can get DPI Life insurance, Mobility insurance and Mosquito insurance.
Yes, you can apply for these policies on PolicyPal mobile app and get it on the go!
DPI Life insurance
Direct Purchase Insurance is sold without financial advice, no commission is charged and you pay lower premiums than comparable life insurance products.
The amount of coverage you can get ranges from $50,000 to $400,000 with each insurer. It covers death, terminal illness and total and permanent disability before age 65. For a start, we offer NTUC Income Life insurance, and will be adding more insurers over time.
Free Term Life insurance
Our partner, Etiqa offers one year free term life insurance to Newlyweds and New Parents for a sum assured of $25,000 upon death of the insured.
Personal Mobility insurance
To provide coverage in the event of any accidents when using personal mobility devices such as bicycles, roller blades, kick scooters etc.
It covers accidental death, permanent disablement, medical expenses incurred and third party personal liabilities.
The premium for 1-month policy: S$26
The premium for 3-month policy: S$39
The premium for 9-month policy: S$59
The premium for 12-month policy: S$78
Mosquito (MozGuard) insurance
A way to protect yourself against expenses incurred due to mosquito-borne disease infection such as Dengue Fever and Zika.
It covers medical expenses caused by: Dengue fever, Zika, Chikungunya fever, Malaria and Yellow fever.
Depending on the dengue alert level of your residence and the sum assured, you may pay premiums between $31 and $58 for an annual coverage.
How do you get insurance from us?
Many people have been asking us how is the purchase process like?
Just speak with Kate, our Artificial Intelligent in-app Chatbot. It’s that simple!
How do you claim your insurance?
Finally, I would like to personally thank you for your patience with us. We’re taking your feedback seriously to enhance your experience with PolicyPal. Thank you once again, it’s an honour for us to assist you with your insurance matters.
Today is a super exciting day for us, as we announce that PolicyPal is the first startup to receive approval from MAS to enter a regulatory sandbox. We will be testing our solution over a 6-month period starting from 2 March 2017 by partnering with NTUC […]
Profits are governed by a simple equation, revenue minus costs. If you work in a company, you will probably understand that everyone wants more sales and more revenue while keeping costs low.
Take for example a bookshop, the more books they sell at a higher price, and the less cost they pay for each book, the more money they will earn. However, for an insurance company, it is not that straightforward.
Insurance companies are a special type of business
The revenue of an insurance company does not simply come from the premiums they receive from you. Similary, the cost is also not simply the amount of claims paid out.
When the insurer receives your premiums, they take them, and put it to use via investments. The revenue they earn is thus the return on their investments using your premiums as capital.
On the cost side, it is not merely the amount of claims paid out. Rather, it is the expected amount of claims being paid out. So how do insurance companies estimate these claims and thus set the premium rates? Read on and find out more.
Estimating the expected claims
Estimating claims is down to the work of actuaries. I would say that insurers are the biggest employers of actuarial science students.
Actuaries use a few factors to estimate the claims. The process is not unlike estimating the value of an unexercised option in finance. Not surprisingly, that is also the work of actuaries.
This is very important to actuaries. For life insurance, insurers look at the mortality rate. The higher the mortality rate (or lower the life expectancy), the less time insurers have to work and invest your money. With a smaller investment horizon, the insurers can only take moderate amounts of risk and thus getting a lower return.
Insurance premiums will have to be increased in the event of a higher mortality rate to ensure a similar profit margin.
For health insurance, insurers pay attention to the mortibity rate. Morbidity rate is to health insurance as mortality rate is to life insurance. Simply put, morbidity rate is the rate at which people fall ill and thus require health insurance. In the same vein, a high morbidity rate would increase health insurance premiums.
Number of insured
Ever wonder why group insurance premiums are always lower than individual insurance policy premiums? The reason lies with the law of small numbers.
With a small sample size, the actual amount of claims paid will vary greatly from the expected or estimated claim amount. On the contrary, a big sample size will have less variance and resemble the estimate very closely.
To reduce this risk of variance, and the possibility of making a loss on any insurance contract, your individual insurance policies will always be higher than that you get in a group insurance policy, with exactly the same coverage and benefits.
Now that you know how insurance companies work, you will understand why you pay higher premiums for some policies and lower for other policies.
To understand how your policies work together, download PolicyPal today and get a comprehensive review of your insurance coverage!
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Before you even bought your first life insurance policy, you are likely to have already come into contact with group term life insurance. The company insurance you are enrolled in is a very simple example of this.
As you go into understanding more into group insurance, you should first recap your understanding of life insurance and health insurance.
What is life insurance?
Life insurance is a contract between you and the insurer. In essence, you pay an amount of money to the insurer (premiums) in return for a guarantee.
The insurer guarantees you a sum of money when certain events occur. These events can be the death of the insured, total and permanent disability, or any injury.
Depending on the benefits schedule, you will receive different sums assured depending on the events.
What is health insurance?
Health insurance is different from life insurance. Health insurance pays you money when you are hospitalized or have to undergo surgery. In Singapore, they are also called hospitalization and surgery insurance.
Health insurance works on a reimbursement basis mainly. The insurer pays back a portion of the total bills you have incurred during your hospitalization or for your surgery.
Depending on the add-ons (aka riders) that you have opted for, this portion can be as high as full coverage of the bills.
What is group term life insurance and what are the differences?
Life and health insurance are also called personal insurance plans. The reason is that you are the one who is in a contract with the insurer. In a group insurance, the contract is between a company and the insurer.
In exchange for premiums, the insurer guarantees a sum assured if certain events occur to a group of people. In practice, the insured is usually the company and the group of people is the employees of the company.
The benefits of group insurance differs, but they should at least provide coverage for death and total and permanent disability. At least, that is the primary objective of a group term life insurance policy.
Some group insurance policies also provide assurance for other events, such as when someone in the group meet in an accident or what he or she needs to be hospitalized. Because of this, you can think of group insurance as a customized insurance plan for a group of people
How should I use my company’s insurance plan?
|Death/TPD||Critical Illness||Accidents||Hospitalization and Surgery|
|Individual Term Policy||$500,000||$300,000||$-||$-|
|Individual PA Policy||$100,000||$-||$100,000||$-|
|Individual H&S Policy||$-||$-||$-||90%|
You can use the above table to organize your insurance policies and visualize your own shortfall.
For a quicker way, you can download the PolicyPal app today and receive a complimentary review of your coverage.
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