Financial Metrics and Mobile Application for Life Insurance Plan Selection

Abstract

There are more than 20 life insurance companies in Thailand, each offering various insurance plans and policies with different features. Consequently, it has become difficult for most people to decide which plan is best for them.  For endowment (or saving) policy, the internal rate of return (IRR) is a prime financial metric commonly employed to compare the returns of different plans. However, for the other types of policies, the IRR cannot be calculated, or if it is calculated, the result can be very negative. These policies, unlike the endowment policy, focus mainly on life coverage rather than saving benefits. Two additional metrics, namely rate of coverage and worth rate, in which the death benefit is considered, have been proposed in this paper to overcome this drawback. In addition, a mobile application has been developed to facilitate users in selecting an insurance plan that meets multiple criteria specified by users in terms of these metrics.  Specifically, after a user fills in the criteria, the application will compute the scores corresponding to each plan, sort them in descending order, and finally display only the top five insurance plans with the highest scores. The application was tested by 30 individual users, and the results were satisfactory, with an average score of 4.84 out of 5, and a standard deviation of 0.11.