3 Reasons Why You Need To Compare Your Insurances Before Buying

Updated: Nov 2, 2023

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The biggest mistake when planning for your insurance is the failure to do your due diligence before committing to an insurance policy.

In this article, I will share with you 3 reasons why you should compare your insurance before buying. For the purpose of the article, I will be using the whole-life insurance instrument as an example to substantiate my explanation.

Reason 1: It Cost You Money to Not Compare

For the same level of sum assured, you will realize that there is a huge disparity in the price that companies may charge you for.

In fact, the difference between the cheapest and the most expensive provider goes up to 70% of which the nominal price differences between companies can easily be in the range of thousands of dollars a year.

If you do not do your due diligence, you are running the risk of paying for more expensive insurance without understanding if it is even worthwhile to pay a higher price for the same level of sum-assured coverage which is why it literally costs you money to not compare your insurances before buying.

Reason 2: Difference in The Scope & Definition of Coverage

While the insurances within the same category often provide coverage for the same type of scenarios, the way the companies may define the scenario, as well as the scope of the coverage, may differ from company to company.

For example, while life insurance providers do provide coverage in the area of total permanent disability and critical illness, the type of definition they may adopt to define total permanent disability as well as the number of critical illnesses that they may cover you for would differ from company to company.

Riding on to the previous point on price, having a clear understanding of what is being covered will help you make sense of whether or not the price charged is worth paying for or if are you being charged more for unnecessary features.

All that being said, these facts and figures can only be brought to attention if you compare your insurance before buying.

Reason 3: Different Return & Risk Factors

For insurance policies that are participating policies such as endowments and whole-life insurance, the amount of estimated cash value, as well as the percentage of the cash value that is guaranteed, will differ from company to company.

If you are not careful, you might end up with a policy with a return that is significantly lower than the industry average as seen from the comparison between company A and CT, or you might commit to a policy that exposes you to higher market risk due to the lower guarantee provided in terms of the cash value estimates as seen from company M.

As such, if you are purchasing a participating insurance policy, you will definitely be better off by comparing the insurances and selecting a company that provides the suitable risk and return behaviour that you need while balancing between the price and coverage received.

Summary

Long story short, if you do not want to run the risk of:

overpaying for your insurance policy
buying insurance with an unsuitable definition and scope of coverage or
committing to a plan with an unsuitable risk and return profile

please do your due diligence and compare your insurance.

All of these can also be found in my eBook: “The Price Of Financial Freedom” which will provide you with a comprehensive guide to help you achieve financial freedom and live life on your terms in the shortest amount of time.

You can download a copy of it for free on my website:

If you do not know how to get started with your financial planning or if you do not have the time to manage your finances or do the necessary market research, you can consider engaging an Independent Financial Advisor who can help you make sense of the market, accelerate your progress and achieve financial freedom by 5 to 10 years earlier!

To find out more information about how you can benefit from my financial and insurance planning services, you can check out what I do on my website here: