Compare a Financial Product: A Seven-Check Method
Define the need before reviewing offers, then compare each option’s full cost over the same period.
In this article
With any financial product, the unease is the same: where to start? A seven-check method, valid for insurance as well as an investment or a card, replaces improvisation. One, the need: write it down before looking at anything, otherwise the offer defines it. Two, the full cost: every fee, brought to a common period. Three, the conditions that must stay true for the promise to hold. Four, the unfavourable scenario: quantified, and never accepted as verbal reassurance. Five, the source: who presents the product and how that person is paid. Six, the date: are the cited rules in force? Seven, the alternative: what does the status quo deliver? A product must do better than that baseline, not merely exist. The method stops at the first check that fails. This article details each step with its standard questions and shows the method at work on three everyday products.
Write the need before looking
The first check comes before any contact with offers. Write down your need in one sentence, with the amount, the horizon and the main constraint. For example: protect the family income for fifteen years, grow $20,000 available in five years, or pay for a roof in eighteen months. Without that statement in advance, the commercial logic flips. The offer defines the need, the product creates its own necessity, and you end up justifying a purchase rather than deciding. The written sentence becomes the yardstick for everything else. Each product presented is measured against it: what serves it moves forward, and what serves something else is called what it is. Serious sellers are happy to work with a written need. Others find it restrictive, which is useful information.
Bring all the costs to one period
Checks two and three go after the vagueness. The full cost includes every fee, one-time, recurring and conditional, converted into dollars over a common period, the year or the total duration. The conditions are the list of what must stay true for the promise to hold: guaranteed or revisable rate, ceiling, behavioural requirements. Converting to dollars over a common period neutralizes clever presentations, such as a small monthly fee that adds up to a lot or a discreet percentage on a large amount. Writing down the conditions neutralizes the oral promise: what is not in the contract does not exist. The question "what would make this promise false?" gets the most instructive answers of the whole process. Ask it out loud.
Demand the downside scenario in numbers
The fourth check is the test most sales fail: the unfavourable scenario, quantified. What happens if the rate rises two points, if the market falls 20%, if you cancel in two years or if the income funding the product is interrupted? Every product has its unfavourable scenario, and an honest presentation includes it in dollars: the exit penalty, the value on early surrender, the payment at the renewed rate. A seller who cannot or will not quantify the worst case of their own product gives you the decisive information of the meeting. Then compare that quantified scenario with your capacity to absorb it. If the worst case is bearable, the product is still open for discussion. If it is ruinous, the discussion ends, however good the central scenario looks.
Verify the source and price the status quo
The last checks frame the decision. The source: who presents the product, with what verifiable expertise, and how that person is paid (commission, salary, fees). Compensation shapes recommendations without invalidating them. The date: are the tax rules and conditions cited in force? Stale information is a common trap. Then comes the alternative, the last safeguard: what does the status quo, or the simplest option, such as a savings account, debt repayment or an index fund as the case may be, deliver? Every product must beat that priced baseline, not merely have good qualities. The method stops at the first check that fails, in order. That is what makes it economical: most bad products fall before the fourth.
Quebec scenario
A guidance counsellor in Roberval was pitched three products in one month: an insurance policy, an investment and a card. She noticed that her unease was the same each time: where to start? So she writes herself a seven-check method, taped inside her planner, and applies it to every offer. One, the need: she writes it down before looking at anything, otherwise the offer defines it. Two, the full cost: every fee, brought to a common period so options can be compared. Three, the conditions: what must stay true for the promise to hold. Four, the unfavourable scenario: what happens if the rate rises, if she cancels or if the market falls. Five, the source: who presents the product and how that person is paid. Six, the date: are the rules cited still in force? Seven, the alternative: what does the status quo, or the simplest option, deliver? She applies the method to the investment proposal she received the day before and stops at check four: the representative never quantified the unfavourable scenario. The next meeting starts exactly there, and the answer she gets changes her decision. The strength of the method, she tells colleagues, is that it brings order, not that it takes intelligence.
Checklist
- Write the need before looking at offers
- Bring every fee to a common period
- List the conditions that must stay true
- Demand the downside scenario in numbers
- Ask who pays the seller
- Verify the date of the cited rules
- Price the alternative
- Stop at the first failed check
- Document the decision and its review date
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