Today, a friend messaged me this:
"Hi, want to check with you. Any good life insurance product in the market to recommend?"
This unsurprisingly-common question is actually rather impossible to answer. Firstly, life insurance covers a whole span of products, including whole life, endowments, term, and so on. Each product caters to different needs, and a proper needs analysis would not be possible without some of the person's key information like age, income, number of dependents, financial circumstances, etc.
Secondly, even if the question is zoomed into a particular product category, say, whole life, there is still no simple answer. This is because premiums are not everything. A product may cost the cheapest, but if it also offers the least benefits, is it necessarily the best value for money?
Thirdly, there usually isn't a product that is uniformly cheaper than all the other insurers' products across different ages, gender, smoking status, and sum assureds. Insurer A may have the cheapest term plan for younger males and for larger sum assureds, but for older females and smaller sum assureds, Insurer B may be cheaper. This happens because each insurer has its own mortality curves, morbidity curves, surrender rates, claims experience, and profit margins, which they use to price their products.
Life insurance is much more different compared to other financial products because each product costs differently for each individual (varying ages, gender, smoker status, sum assureds) and also caters to specific needs. Thus, it is always advisable to do a proper fact find with an insurance agent or financial adviser before purchasing life insurance.
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