Life Insurance Association of Singapore Survey Results 10 November 2006 1
Research Objectives To ascertain : The general population s understanding of life insurance The general population s perception towards financial advisers 2
Contents 1. Overview a) Section 1: The general population s understanding of Life Insurance b) Section 2: The general population s perception towards Financial Advisers 2. Conclusions 3
Methodology Telephone interviews with 514 randomly selected respondents Age: 20 to 54 years old working adults Household income > or = S$3000 Quota sampling was used so that the interviewed samples were balanced across the ethnicity, age and gender The results were weighted to reflect the population. However, household income was not taken into the weighting Fieldwork was carried out in July 2006 4
KEY FINDINGS 5
Section 1: The general population s understanding of life insurance 6
87% of respondents own life insurance policy. Females are more likely to own life insurance policy than males. Q1: Do you currently own any life insurance policy? Drill down on the opinions of specific age groups Age Group 100% 80% 60% 40% 20% 0% 16% 10% 13% 84% 90% 87% Male Female Yes No Population 50 to 54 years old 83.8% 45 to 49 years old 90.5% 40 to 44 years old 92.2% 35 to 39 years old 89.0% 30 to 34 years old 88.6% 25 to 29 years old 86.0% 20 to 24 years old 73.8% % 0% 25% 50% 75% 100% n = Those who own life insurance policy 7
Whole Life Policy is the most commonly held policy type, with 73% of Life Insurance policyholders owning one. Q2: What kind of life insurance policy do you own? Others Long-Term Care Policy Regular Premium Investment Linked Policy Hospital Cash Disability Income Policy Single Premium Investment Linked Policy Term Life Policy Critical Illness Policy Medical Expense Policy Endowment Policy Whole Life Policy 9% 9% 14% 17% 19% 19% 25% More male than female has Hospital Cash policy. More people in the 30-34 age group own this policy 45% 46% 59% 73% 0% 20% 40% 60% 80% n = Those who own life insurance policy 8
79% have both Critical Illness & Basic Death coverage in their insurance polices. Q3: Which of the following do you have in your insurance policies? No comment/don't know 1% Neither 2% Both 79% Critical illnesses 86% Basic death cover 91% 0% 20% 40% 60% 80% 100% n = Those who own life insurance policy 9
Males tend to have a higher coverage then females. 36% of females have less than $100,000 coverage Q4: What is the total amount of basic life coverage you are getting from your life insurance policy or polices? I don't know 13% 21% 18% Male More than $300,000 5% 8% 11% Between $200,000 and $300,000 7% 10% 13% Between $100,000 and $200,000 29% 34% 38% Less than $100,000 24% 31% 36% Female 0% 10% 20% 30% 40% 50% Population Female M ale n = Those who own life insurance policy 10
33% of those who own a life insurance policy cited 1 4 times their annual earnings as adequate coverage while 35% of them had no idea what would be adequate. Q5: What do you think is adequate basic life coverage for yourself given your current situation? I don't know 35% More than 10 times Annual Earnings 7% Between 5-10 times Annual Earnings 15% Between 1-4 times Annual Earnings 33% 1x Annual Earnings 10% % 0% 10% 20% 30% 40% 50% n = Those who own life insurance policy 11
48% of the respondents seek their agents advice to determine how much protection they need. Q6 : How do you determine how much protection you need? Others From discussing with family members By reading various media articles No comment/don't know Based on personal needs/judgement 7% 6% 6% 8% 10% From speaking with friends 23% Through advice from my agent 48% 0% 10% 20% 30% 40% 50% n = Those who own life insurance policy 12
Respondents state that the primary reasons for purchasing life insurance policy is as a form of savings and to protect their family should they become permanently disabled. Q7 : What are your top three reasons for buying a Life Insurance policy? Others Income protection A form of investment 9% 7% 10% Planning f or old age and retirement 21% Coverage f or critical illnesses Saf eguard against medical and hospital expenses To provide decent standard living f or my f amily if I die 36% 42% 45% Protect my f amily should I become permanently disabled A form of savings 60% 64% 0% 10% 20% 30% 40% 50% 60% 70% n = Those who own life insurance policy 13
Section 2: The general population s perception towards life insurance agents 14
79% of the respondents have a financial planner / life insurance agent. Among those that don t have one, the most popular reason cited is because they don t need one. Q11: Do you have a financial planner / life insurance agent? Q11a : If NO, why not? Others 30% No 21% I am still evaluating the choices I have I don't know one 5% 7% Yes 79% I didn't plan to buy life insurance 23% Compared to the other age group, more people in the 20 to 24 and 50 to 54 age groups indicated that they do not have a financial planner / life insurance agent. I don't need one 0% 10% 20% 30% 40% 39% 15
52% of those who have a financial planner / life insurance agent, cited that the agent is one of their friends. Q12: How did you get to know your financial planner / life insurance agent? Others 5% I w as approached by the financial planner/lia 10% The agent is one of my family members or relatives 10% The agent is a referral from my friends, family or relatives 26% The agent is one of my friend 52% 0% 10% 20% 30% 40% 50% 60% n = Those who have a financial planner / life insurance agent 16
The majority of those with a financial adviser hold positive views of their adviser / life insurance agent. Q13 to Q 15 I have a good relationship with my financial planner / life insurance agent 6% 29% 65% I believe that my financial advisor / life insurance agent has my best interests in mind when giving me advice 9% 26% 65% Disagree Neutral Agree I believe advice from a professional advisor is more reliable than advice from friends/relatives/media 11% 25% 64% 0% 10% 20% 30% 40% 50% 60% 70% n = Those who have a financial planner / life insurance agent 17
Over 80% of respondents agreed that financial planner / life insurance agent are friendly, helpful, and knowledgeable Q19: Adjectives used to describe life insurance agents and representatives. Friendy Efficient Knowledgeable Understands my needs Helpful Honest Hardworking Looks after my interests 3% 4% 3% 5% 3% 2% 1% 7% 13% 19% 16% 21% 15% 26% 24% 23% 85% 76% 81% 74% 82% 72% 74% 70% Disagree Neutral Agree 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% n = Those who have a financial planner / life insurance agent 18
Regardless of frequency, 85% of the respondents don't feel the need to increase their contact with their agent. Q16: On average how often do you discuss your financial affairs with your financial planner / life insurance agent? Q17: What do you think of this frequency of contact? Only when I need to buy something 32% Never 5% Monthly 8% Quarterly 10% It is too much No comment No need/not necessary 2% 2% 3% Half yearly 15% It is not enough 8% 31% - Only when I need to buy something 26% - Less often 21% Half yearly Less often 14% Annually 16% It is sufficient 85% 0% 20% 40% 60% 80% 100% n = Those who have a financial planner / life insurance agent 19
Conclusion The general population s understanding of Life Insurance 87% of those interviewed own life insurance policy The top two reasons for buying a life insurance policy are to protect their family should they become permanently disabled and as a form of savings 33% of those who own a life insurance policy cited 1 4 times their annual earnings as adequate coverage while 35% of them had no idea what would be adequate. 48% of the respondents seek their agents advice to determine how much protection they need. The general population s perception towards financial advisers 79% of the respondents have a financial adviser. The majority of those with a financial adviser hold positive views of their adviser / life insurance agent. 20
Thank You! 21