Insurance 3 Tips You NEED to Know About Insurance

3 Tips You NEED to Know About Insurance

Everybody needs insurance at some point in their lives, but you’ve got to understand that the entire industry is a total money-making machine.

It is way easy to get ripped off if you don’t follow a few simple rules so in this article I’m covering the three things that you need to know about insurance so that you don’t get ripped off.

insurance
insurance

You can be a little bit smarter about it so that you can save some money and all of these strategies apply to all the different types of insurance like life health and auto insurance so definitely pay attention. Hopefully, you’ll learn something new.

Now I’ll warn you right now that I’m not a professional when it comes to insurance so definitely seek one out if you’re looking for that type of information. Still, I do know that basic math can usually cure a lot of these problems and that’s what I’m into, so this is the information that I’m going to share with you guys.

Table of Contents

First

The first thing that you need to know about insurance is that you should always shop around with a whole bunch of different companies before you go with any insurance and then also don’t stay with the same company forever because a lot of the time you’re going to find better deals elsewhere I say this because statistically, you will remain with the same company for years because once you get your automatic payments set up, you’re probably not going to switch companies.

After all, that’s just how it is insurance companies make everything super complicated to understand so naturally we don’t even want to change companies just because it’s a lot easier in that sense.

I would recommend that every couple years you look into a bunch of different insurance companies and check their premiums and their coverage to see if maybe you can get some better value out of another company plus a lot of the time you’ll find that when you threaten to cancel your policy, they’ll come back with a better rate because they’re trying to negotiate you to stay on board with them and this all happened just because you’re looking at different companies so if you do love your insurance company.

You never want to leave them then I would at least do this tactic to make sure that your rates don’t inflate over time. The goal here is to get the most coverage that you possibly can from your insurance while at the same time paying the lowest premium possible, and that’s pretty much all that I would ever worry and then keep in mind that a lot of the insurance companies that you see on TV are some of the most expensive ones out there because they have to pay for all that marketing.

They have a bunch of gimmicky features that you also have to pay for as well you need to do a little bit of research, and I guarantee you you can find a lot of insurance companies out there that have reasonable prices and excellent coverage.

Second

Now the second thing you need to know about your insurance is how your deductibles can affect your monthly premiums. I want you to pay attention here because I think I can save you some money so.

The way your deductible works is that whenever you have to claim with your insurance, you’re going to have to pay your deductible first before they end up paying out any money and this is all pretty simple.

But the problem is when you have a low deductible you’re going to have higher monthly premiums, and this is a problem because you usually don’t need to use your insurance. After all, the way it works is that if you have a $500 deductible on your car and then you make a claim you’re just going to have to pay at least $500 before they’re going to pay anything out and then your monthly premium.

I would bet it is probably around 75 bucks a month but if you change your deductible to $1,000. You are going to have to pay$1,000 if you need to make a claim but the thing is is that your monthly premium is going to go down to probably 55 bucks a month and statistically that’s going to save you a lot more money over time.

So with this math, you can tell that in two years you’re going to make up four hundred and eighty dollars which is almost the difference in that deductible so as long as you’re not getting in a wreck in two years or so

It’s a better value for you, but if for some reason you’re the type of person that arrives in a wreck every six months or so later I would go with the lowest deductible possible because you’re probably going to end up needing it and that’s going to save you more money.

But overall if you look at the stats you’re going to find that; statistically, you’re probably not going to get in a car wreck, and that’s why I’m always going to recommend going with the higher deductible and keeping the lower premiums because it’s still going to save you more money in the long run.

Another thing here is that if you have an emergency fund saved up then this is what you should be using for your deductible, and you should always keep your premiums low just because you have an emergency fund to cover the problem if something happens and then also keep in mind that no matter what your deductible is you’re probably not going to claim with your insurance unless you have to because the problem here is that when you make a generally your premiums are going to go up a little bit, and that’s something that we all try to avoid

So a lot of the times unless you’re getting into a big accident this isn’t something that you need to worry about now if you do end up calling your insurance provider and raising your deductible.

Still, your premiums only go down about a dollar a month then I would say that this probably isn’t a good thing to do because it’s going to take way too long for that money to make sense as far as value goes so if that does end up happening then I would stick with the same deductible that you already have or I would look into going with a different insurance company to find something better.

Third

Then the third thing you need to know is that a lot of different types of insurance out there are a total ripoff so what I want you to do in most cases are just some basic research and some basic math, and you can easily find out if it’s going to be a good value for you or not.

It’s kind of like when you go to Best Buy, and you get a new laptop for only 300 bucks. Still, then they offer you an extended warranty for$100 as insurance, but that’s just a total ripoff because that’s a third of the cost of the laptop only for something that’s probably not going to happen so that right there is a prime example of insurance that I think is a total ripoff.

Because it’s just not worth spending that much money to cover something that you can replace yourself because at the end of the day I feel like you should only be getting insurance.

If you can’t replace the item or repair it on your own now take for example whole life insurance which is a life long life insurance policy with the built-in savings accounts well in my opinion.

I don’t think it’s worth it and I’m going to give you two examples right here that I think you will agree with the first reason is just the fact that when you’re older, you probably don’t need life insurance anymore because at that point you’re going to have your assets all paid off and if something did happen your family should be safe at that point in your life, and that’s one of the big problems.

I have with whole life insurance because you’re paying more in your premiums just to have a giant life insurance policy when in reality you don’t need it for your entire life you only need it for 10 or 20 years when you’re young when you have to pay off those assets and if something happened to your family you couldn’t pay them off, but when you’re older you’re not going to have that problem, and honestly, in some situations, it does make sense to have a life insurance policy when you’re older

But I feel like, for the most part, you should have your debts paid off by that time in your life and like I said earlier the only reason that you need insurance is to cover something financially that you can’t cover on your own if something were to happen to it now the other stupid thing about whole life insurance, in my opinion, is that a lot of your premiums are going into an investment account which is something that I don’t think that you should be paying for on top of the premiums on your life insurance.

It might sound like a good idea on the outside to have an investment accountinside your life insurance policy but the problem with it is that it’s a totalripoff because there’s a ton of hidden fees in there that you have to pay andyou’re actually going to end up with an investment that’s paying out less than the Nifty 100 index which you can get on the stock market I mean the average return from the nifty 100 index all the way back to 1923 has averaged 10% ifyou’re not including inflation so the thing is is that that’s actually a farbetter return than you could ever get from your whole life insurance policyand that’s why I don’t agree that it’s a good idea to be spending your extramoney on a stupid policy when you could invest it on your own.

So if it were me I take the extra money that you would be spending on your premiums but instead, I would invest that in the stock market on my own terms so that I could get a better return because remember that any extra money that you’re paying on your monthly premiums is money that you could be using as an investment or just something else in your life rather than insurance do some basic math and some basic research.

Whenever you’re looking for any insurance because a lot of the time you’re going to find out if it’s worth it or not just by doing those two things there are a ton of big commissions in the insurance industry and that’s why they always want you to buy all the stupid fancy policies and the add-ons.

Still, in reality, you need to do your homework and your research so that you can get the best value for the insurance policies that are best for you.

Navjyot Pandey
I connect with individuals, communities, and news outlets to help educate them on money matters and stimulate financial awareness.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles