SINGAPORE — NTUC Income has launched a new micro-policy insurance model that allows customers to spread out premium payments over many micro-transactions for as little as S$0.30 at the touch of a mobile application. 

The service, named Snack, allows users to tag premium payments that are less than S$1 to various activities such as travel on public transport or buying food and drinks.

The micro-payments will accumulate to pay off coverage for insurance plans that include critical illness and personal accident policies — unlike the traditional way of paying premiums with one lump sum a year or by monthly payments.

There is also no need for an insurance agent because it can be activated through an app. There are no conditions on how frequent the policyholder must pay the premium and customers may cancel the micro-policy at any time. 

Each micro-policy is subject to a specific sum of coverage, depending on the client’s profile and tier of premiums paid. It is valid for 360 days from the date of payment.

This new payment method comes after NTUC Income partnered ride-hailing firm Grab last year to offer a micro-insurance plan for Grab drivers to better protect themselves against critical illnesses.

This round, the insurer has partnered with transport card issuer EZ-Link, food app Burpple and maker of fitness tracking device Fitbit, with more companies such as Visa credit card coming onboard, it said. 

HOW IT WORKS 

Users of Snack can opt for three tiers of micro-premiums (S$0.30, S$0.50 and S$0.70).

They may pair one or more lifestyle routines with selected micro-policies to pay the premiums. Payment will be made from the credit card linked to the Snack app. 

Other lifestyle routines they can tag include completing 5,000 steps with a Fitbit tracker or buying food and drinks with Burpple, subject to a weekly cap of S$50 for each.  

Over time, the user can gradually build his or her insurance coverage. 

For instance, a 25-year-old male non-smoker who commutes on public transport daily can accumulate S$321 of coverage a trip if he chooses to pay 30 cents on top of the fare as a premium for critical illness coverage. This can be done by linking his EZ-link card to the transport trigger in the app.  

The insured can set a personal weekly limit to the premiums payment, and can stop using the lifestyle triggers at any time. 

Those with pre-existing health conditions are not eligible for these micro-policies. 

TYPES OF COVERAGE OFFERED

Snack offers three micro-policies: Critical illness, personal accident and term life coverage.

The maximum coverage for critical illness and term life is S$200,000, while the personal accident coverage is S$100,000.

Claims can be made from the app and will be received via digital payment service PayNow. 

FREELANCERS, STUDENTS MAY BENEFIT

Mr Peter Tay, chief digital officer of NTUC Income, said that the use of micro-policies and premiums “makes insurance more accessible and relevant to everyone, keeping it easily adaptable to lifestyle needs and personal financial situations”.

He added that tertiary students and the self-employed will benefit from it, while those with fixed incomes can use it to complement existing plans. 

Ms Viviena Chin, chief executive officer of wealth management firm Eternal Financial Advisory, agreed, noting that those with variable incomes are likely to benefit from micro-policies. 

However, while such innovation is useful for some segments of the population, not all will subscribe to it. She said: “Insurers have different target audiences in a market that is competitive and innovative.

“This trend can be another avenue to target other groups, but not all would be on board.”

This is because financial planning is sophisticated and requires expertise, Ms Chin said.

DIGITAL SHIFT

Other industry players interviewed by TODAY said that several shifts are taking place in the insurance scene, such as the digitalisation of services.

Ms Tng Hui Min, a senior financial consultant with insurance firm Prudential, noted the rise in lifestyle technologies and apps. “Companies have been bringing some solutions online and changing the way insurance can be bought by tailoring solutions to the lifestyle of consumers,” Ms Tng said.

“Most Singaporeans are tech-savvy and the digital penetration here is high. These innovations have become prevalent in many industries and so, the insurance sector is also innovating and digitalising to meet the demands of our customers.”

Mr Ryan Cheong, managing director of insurer Great Eastern’s digital for business unit, also said that the digitalisation of the industry helps to provide customers with holistic support for their needs.

Insurance firms here approached by TODAY said that while they do not offer micro-policy plans, they have adopted similar approaches for traditional insurance policies. 

For example, a spokesperson for Prudential said that its PruCancer 360 and PruActive Saver II plans are made with the focus of being affordable, customised and flexible.

Great Eastern has also rolled out policies such as the Great Comprehensive Care that provides coverage for as little as S$1 a day that it said would help the self-employed and gig-economy workers.