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Dumbest "Insurance" Product Ever? NTUC Income's Droplet

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Old 05-12-2018, 04:05 PM   #1
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Dumbest "Insurance" Product Ever? NTUC Income's Droplet

There are some supremely dumb insurance (and "insurance") products available in Singapore and elsewhere. Do we have a new winner in the contest for Dumbest Insurance Product? Could be!

NTUC Income has introduced Droplet, an "insurance" product that works like this:

1. You pay NTUC Income a premium (of course!) at least one day in advance, and depending on the number of days you want to cover;

2. During your coverage period, if it rains, if Grab charges "surge" pricing, and if you book and pay for a Grab ride during the surge, then you can submit your receipt to NTUC for reimbursement of 60% of the surge uplift.

Yes, that's right. You can avoid the horrible, awful, life destroying calamity of maybe having to pay $3 or $10 more for a taxi ride if you simply guarantee payment of a premium to NTUC Income -- and then you'll still pay $1 to $4 of the surge uplift. Of course you could also take public transit, wear a raincoat, get in the standard taxi queue (virtually or physically), etc. Or just pay the whopping $4 or whatever.

I missed the Droplet announcement back in late October, but here's a press report from that time. There's been some "You've got to be kidding!" reactions even from outside Singapore as this news has spread. What made me take notice is today's Straits Times, which includes an opinion piece wondering whether the Singapore government is going to have problems fostering new innovations and enterpreneurs, which involves some risk taking, when there are evidently people so afraid of rain and a possible slightly higher taxi fare that they'd seek "insurance" for that. I think he was joking a bit, but there's a grain of truth in the joke.

No, I do not recommend you sign up for Droplet.

I hear FWD is working on apple insurance ("Apple Guard"), which will help defend against the risk that your local Fairprice will raise apple prices by 10 cents each. Pears, bananas, oranges, and other fruits are not covered unless you get optional riders. Prudential's actuaries are busy setting premiums for computer printer insurance ("Inksurance"), so that you can get a replacement ink or toner cartridge(*) if the cartridge doesn't work out of the box. (* Higher premium applies for toner cartridges.) Over at Great Eastern there's a steamboat insurance policy in the works ("Steamboat Safe") that'll pay a $500 benefit if you're accidentally burned in a restaurant with food heating gear at tables, excluding flambés, and a $1,000 benefit for third degree burns. However, no benefit will be paid if anybody at the table ordered any alcoholic beverages. Singapore Life is supposedly coming out with "Debit Card Comfort" which will reimburse the fee your bank charges to replace your lost or stolen debit card, up to $10 per loss.

Yes, I'm joking, but at this rate of "insurance innovation," maybe I'm not.
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Last edited by BBCWatcher; 05-12-2018 at 04:08 PM..
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Old 05-12-2018, 04:17 PM   #2
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lol, just like Cambodians betting on rain.

https://www.phnompenhpost.com/7days/...ng-warm-fronts

http://sea-globe.com/gambling-on-the-rain-in-cambodia/

Last edited by Tiger9119; 05-12-2018 at 04:27 PM..
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Old 05-12-2018, 04:19 PM   #3
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You are right. It's ridiculous.
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Old 05-12-2018, 04:20 PM   #4
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There are some supremely dumb insurance (and "insurance") products available in Singapore and elsewhere. Do we have a new winner in the contest for Dumbest Insurance Product? Could be!

NTUC Income has introduced Droplet, an "insurance" product that works like this:

1. You pay NTUC Income a premium (of course!) at least one day in advance, and depending on the number of days you want to cover;

2. During your coverage period, if it rains, if Grab charges "surge" pricing, and if you book and pay for a Grab ride during the surge, then you can submit your receipt to NTUC for reimbursement of 60% of the surge uplift.

Yes, that's right. You can avoid the horrible, awful, life destroying calamity of maybe having to pay $3 or $10 more for a taxi ride if you simply guarantee payment of a premium to NTUC Income -- and then you'll still pay $1 to $4 of the surge uplift. Of course you could also take public transit, wear a raincoat, get in the standard taxi queue (virtually or physically), etc. Or just pay the whopping $4 or whatever.

I missed the Droplet announcement back in late October, but here's a press report from that time. There's been some "You've got to be kidding!" reactions even from outside Singapore as this news has spread. What made me take notice is today's Straits Times, which includes an opinion piece wondering whether the Singapore government is going to have problems fostering new innovations and enterpreneurs, which involves some risk taking, when there are evidently people so afraid of rain and a possible slightly higher taxi fare that they'd seek "insurance" for that. I think he was joking a bit, but there's a grain of truth in the joke.

No, I do not recommend you sign up for Droplet.

I hear FWD is working on apple insurance ("Apple Guard"), which will help defend against the risk that your local Fairprice will raise apple prices by 10 cents each. Pears, bananas, oranges, and other fruits are not covered unless you get optional riders. Prudential's actuaries are busy setting premiums for computer printer insurance ("Inksurance"), so that you can get a replacement ink or toner cartridge(*) if the cartridge doesn't work out of the box. (* Higher premium applies for toner cartridges.) Over at Great Eastern there's a steamboat insurance policy in the works ("Steamboat Safe") that'll pay a $500 benefit if you're accidentally burned in a restaurant with food heating gear at tables, excluding flambés, and a $1,000 benefit for third degree burns. However, no benefit will be paid if anybody at the table ordered any alcoholic beverages. Singapore Life is supposedly coming out with "Debit Card Comfort" which will reimburse the fee your bank charges to replace your lost or stolen debit card, up to $10 per loss.

Yes, I'm joking, but at this rate of "insurance innovation," maybe I'm not.
They let you choose the day you want to buy then it is some kind of betting lah. Smart Nation, Fintech casino.
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Old 05-12-2018, 05:38 PM   #5
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They let you choose the day you want to buy then it is some kind of betting lah.
It looks like you have to pay the premium for a minimum of two days, and you have to buy at least one day in advance. But if you only buy one day in advance, then you pay a higher premium. (Weather forecasts are a bit more accurate 12+ hours out.) There's also a daily claim limit of $50.

NTUC Income has a quote from somebody named Irene Tay, "Frequent Grab Rider": "I got hit with a $50 trip fare because it rained. It happened not once, but 3 times in a month!" The horrors!

OK, let's pick that apart. First, the normal fare is $20 let's suppose as something of a worst case, so Irene paid $90 extra in Grab fares for the month (3 x $30 uplifts).

OK, how much would it cost to insure 20+ work days, let's suppose? If Irene insures next week, Monday through Friday (December 10 through 14), it's a $14.10 premium. Oddly enough it's $15.00 for the following work week (December 17 to 21), probably because next week's forecast is for a relatively dry week. December 24 to 28 is also $15.00. And December 31 to January 4 is $15.00 again. (We'll include public holidays for this analysis. We just need the premium figures, and NTUC only publishes those through January 4 as I write this.) That's a total premium of $59.10, and let's round that up to $60 to account for the fact there are slightly more than 20 work days in a month. Yes, I checked to see if a single coverage period spanning December 10 through January 4 would be cheaper, but it's not -- it's a lot more expensive. We'll assume Irene just cares about the work week and not weekends, but that's only an assumption to try to make this policy look good.

If I understand the Droplet policy terms correctly, Droplet would pay 60% of Irene's $90 surge uplift, so $54 in this example. So in exchange for paying $60 of premiums to cover her work days, the reference customer that NTUC cites would get back $54. She's down $6 in this contest.

....What am I missing? This is NTUC's Irene, and the math doesn't add up except in NTUC's favor.

Last edited by BBCWatcher; 05-12-2018 at 05:42 PM..
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Old 05-12-2018, 06:06 PM   #6
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Which is not dumb other than the term / travel insurance?
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Old 05-12-2018, 06:15 PM   #7
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Making money from this insurance
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Old 05-12-2018, 06:23 PM   #8
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Which is not dumb other than the term / travel insurance?
These are essential insurances.
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Old 05-12-2018, 06:27 PM   #9
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Making money from this insurance
you mean the insurer?
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Old 05-12-2018, 06:35 PM   #10
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If you venture outside Singapore, travel medical insurance with medical evacuation/medical repatriation coverage is rather important. But I'm not too impressed with the locally sold stuff, as a general rule. Coverage needs also vary depending on where you're going.

Other forms of travel insurance are mostly pretty silly, especially since you can/should be charging your trip on a reasonable credit card (and paying the balance in full on time every month).

Insurance is only ever indicated when:

(a) There is a possible grave catastrophe or calamity you face -- some serious harm you could experience;
(b) That you cannot reasonably cope with on your own (cannot self-insure);
(c) That a substantial monetary payout would reliably help make better.

If you're considering any insurance product, and if it does not pass all three of these tests, then you most probably shouldn't buy it. Droplet fails these tests.
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Old 05-12-2018, 06:44 PM   #11
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you mean the insurer?
Yup.
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Old 05-12-2018, 11:46 PM   #12
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Is it dumber than taking the insurance bet in Blackjack when dealer has an Ace?
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