Should You Buy Insurance Yourself or Go Through an Agent?

This post was originally posted on Planner Bee.

Buying the right insurance is a crucial decision when it comes to securing your financial future and protecting your loved ones. A common dilemma many people face is whether to go for Direct Purchase Insurance (DPI) or to buy a policy through an insurance agent. Each method has its own set of benefits and drawbacks, and the best choice often depends on your personal circumstances. This article will help you weigh the pros and cons of both options so you can make an informed decision.

What is Direct Purchase Insurance (DPI)?

DPI lets you buy basic insurance products directly from insurance companies, often through their websites. These policies are designed to be straightforward and affordable because they cut out agent commissions.

How is buying insurance through an agent different?

Insurance agents are licensed professionals who can:

• Recommend policies based on your specific situation
• Explain complex terms and conditions
• Add customized coverage through riders
• Help with paperwork and claims

What is the difference between DPI and buying through an agent?

As self-service options expand, many consumers wonder whether to buy insurance directly or work with a professional advisor. Both approaches have distinct advantages, but choosing between DIY insurance and professional guidance requires careful consideration. Let’s examine the differences:

1. Cost considerations

DPI policies typically cost less than traditional insurance since they are sold directly by insurers without agent fees or commissions. While buying through an agent means higher premiums, the additional cost may be worthwhile if you need professional guidance.

Choose DPI if you’re comfortable making insurance decisions independently and want to save money.

2. Level of advice and guidance

DPI suits self-reliant individuals who understand their financial needs and prefer to research and select coverage independently. In contrast, working with an insurance agent provides professional guidance, help with understanding complex terms, and recommendations for coverage options you might otherwise overlook.

3. Customisation options

Direct Purchase Insurance offers basic, standardized coverage with limited customization. This suits people with simple insurance needs. For those requiring tailored coverage, insurance agents provide more options through add-ons, riders, and specialized benefits.

4. Convenience and process

Direct purchase insurance offers a faster, more convenient buying process through online platforms or insurance companies. While agent-sold policies involve more consultation and paperwork, agents manage these tasks for you.

Choose DPI if you prefer handling insurance matters independently, or work with an agent if you want guided support throughout the process.

5. Claims handling and support

With direct purchased insurance, you must manage claims independently without an agent’s support. While simple claims may be manageable, complex ones can be challenging.

Insurance agents typically help by handling paperwork and communicating with insurers, making the claims process less stressful.

6. Product availability

DPIs offer only basic term and whole life insurance policies with standardized coverage. In contrast, insurance agents can provide a comprehensive range of products, including investment-linked policies, critical illness, disability, and specialized coverage options.

Comparison at a glance

Which option should I go for?

Ultimately, the decision boils down to your needs and preferences:

• Choose DPI if you are comfortable making your own decisions, want to save on premiums, and have simple insurance needs.
• Choose an insurance agent if you want personalised advice, customised policies, ongoing support, and don’t mind paying a bit more for the added value.

There’s no one-size-fits-all answer, but understanding the pros and cons of each method can help you make a choice that aligns with your goals and comfort level. Remember that the best insurance policy is one that provides you with the right amount of protection, meets your specific needs, and fits within your budget.

Still can’t make up your mind? Reach out to us at [email protected], and we’d be happy to guide you along.

Read more: 4 Ways To Buy Insurance in Singapore