The Monetary Authority of Singapore (MAS) is seeking feedback from the public regarding the proposals to reduce the amount of information collected by financial institutions from their clients for selected insurance policies.
The proposals will enable consumers to meet their protection needs more easily through the purchase of simple and cost-effective insurance policies.
MAS and MoneySense in collaboration with the CPF Board as well as finance industry associations launched the “Basic Financial Planning Guide” in October 2023 to help Singaporeans take steps to enhance their financial well-being.
The guide outlines a few rules of thumb for individuals to start taking proactive steps to address their savings, insurance and investment needs. In particular, it encourages Singaporeans to allocate up to 15% of their take-home pay on insurance protection.
Consumers are also advised to obtain insurance coverage of nine times their annual income for death and total permanent disability, and four times their annual income for critical illness.
Six customised variations of the guide were issued on Jan 31 to illustrate the financial planning needs of individuals at different life stages.
MAS is now proposing to reduce the amount of information which financial institutions are required to collect from clients when they make recommendations on term life insurance and standard critical illness policies that are based on the rules of thumb in the guide.
This will simplify the process for consumers and encourage the offer of simple and cost-effective products to help consumers meet their protection needs — subject to the limits in the guide.
The MAS invites interested parties to submit their comments on the public consultation paper proposals by March 15.
