The Broker Advantage: Life Insurance

If you landed on this page, you’re likely interested in some kind of life insurance. Maybe you just got married, had a kid, bought a house, or achieved some other life event. Regardless of what triggered it, you’re now looking at the different life insurance options available.

If you’ve been doing a bit of research on your own, you’ve likely come across a lot of new jargon and confusing terms and conditions. There are also a lot of options out there and you don’t know which one is right for you.
Don’t worry – these are all things a broker can help with.

What are my options?

Hong Kong is a major financial hub and therefore enjoys a wealth of life insurance options: HSBC, Manulife, AIA, AXA, and so on. But before we go into individual companies, let’s first talk about the 2 main categories of life insurance: term and whole life policies.

Put simply, a term life insurance policy only lasts for a set number of years. This can range from anywhere between 10 to 50+ years. After the policy expires, you have no coverage. This is usually the least expensive option.

A whole life insurance policy, as the name implies, lasts your whole life. For this policy, you will continue paying premiums until the policy is cashed in. This option to usually more expensive than term life insurance policies.

How does a broker can help?

Rather than contacting life insurers directly, I recommend going through a broker. A broker can help in 3 main ways: making sure the product you buy fits your needs, works as your advocate when dealing with the insurer and helps you choose a financially strong insurer.

Unlike speaking directly with the insurer, a broker represents many different life insurance companies and can recommend the product that would be the best fit for your needs. A salesperson working for the insurer is limited in that they can only sell you products from the company they work for.

A broker also works as your advocate. They can help you navigate the murky waters of filing a claim and dealing with the insurance company in general. In the long run, expert advice from a broker can really be a lifesaver.

And finally, one of the most often overlooked roles of the broker is to recommend an insurer that is financially strong and will be around to pay claims down the road. This is particularly important for long term policies like life insurance. Let’s use one
insurer, Transamerican Life, as an example.

Transamerica Life (Bermuda)

Transamerica Life (Bermuda) is one of the top 10 largest life insurers in Hong Kong. They hold $8,449 million USD in assets with just $7,345 million USD in liabilities. Their assets are mostly held in a highly diversified mix of investment grade corporate bonds with the rest held in cash. This conservative asset allocation allows them to achieve stable returns over the entire policy term and ensures they will be around when the time comes to cash in your life insurance policy.

In summary, a broker can make sure you’re getting the right product, help you deal properly with the insurance company and make sure you’re buying a policy from a creditworthy insurer that will be around in the long term.