You might think you have done your job well, by getting yourself all covered up in multiple insurance policies, and now sitting back with hands behind your head, with the feeling of premium level protection.
But hey, are you paying too much on insurance? You might be pretty much covered head to toe, but do you really need that much insurance?
In the end, are you making a big loss by paying huge premium rates, that eat up nearly more than half of your income?
Then, you might need to review your insurance papers once again. For, we are explaining how to make sure you are not paying in excess!
This is a top-notch insurance awareness post that is aimed to let people purchase only the right amount of insurance they need. Consider this as your guide to improve your insurance portfolio, if you believe you are at a big loss.
Or even better, read this post thoroughly, before going out to purchase a policy. You are here on time, if you have not yet purchased too much of insurance.
Here’s what you should know about overpaying for insurance policies.
What type of insurance policies have you bought?
Overpaying for insurances occur, when you buy policies that you don’t need. Like, there are a few basic ones, that we all must have, while there many add on coverages and riders, that not most of us usually require.
You must have at least one policy for health/medical insurance, a life insurance, an auto insurance (if you have a vehicle), and a home insurance (if you have your own residence).
But, too much riders or add ons, can become ‘panic-struck’ expenses, like a medical insurance policy for a critical illness (ex: cancer), that you think you might have some day. Or paying for earthquake insurance, when you are far away from an earthquake prone zone. Or a flood insurance, that probably you will never need.
Now, what riders or add ons, your policies are topped up with, is only for you to make the scrutiny. If you are not sure, as in what your policies are covering, and how much you are paying for them, talk it through with the respective agent, or walk up and down your policy coverages and exclusions. All those, that you need, are okay and can stay on the policy. But any policies or riders, that you don’t feel the necessity of, should be deleted out from the policy coverages.
Are there any other ways to strike down insurance costs?
Only one of a kind probably. But it is pretty strong enough to give you potential amount of coverage, when you require the need of financial backups.
Build enough savings, and pay low premiums on your policy:
Your savings can be your ultimate solution, for paying only a minimum amount for insurance policies.
In practical, we need insurances, because we can’t completely rely only on our own personal savings or net worth, for fighting costly emergency expenses.
In fact, you should be pretty more eager to build your personal savings, rather than giving away all your hard earned cash into a game of probability and prediction.
Insurances are all good only when you are hit by a catastrophe and you get to claim your money, else look for yourself, where your money goes in the end.
Also, when you are not spending a chunk of your income toward insurance, you can solidify your other financial standings. Like, you can reduce insurance cost to pay off debt, or plan lucrative investment options, rather than paying high premiums on your policies with full of uncertainties.
Is whole life insurance better than term life insurance?
This is a bonus inclusion, and I have inserted this because, for many people, whole life insurance can function as a good savings option, or an investment.
Unlike term life, whole life insurance policies have an asset build-up portfolio, and your money is not wasted.
But, if you already have enough savings, and just need a slight backup in times of mishaps, then you are better off with term life.
Again, whole life may not be a good option, if you have come up with an investment vehicle that has more return, than the cash value offered by a whole life.
Always do the math yourself. No one can help you more to decide what you want, and how much you want.
Be wise, and make some fruitful decisions.
With proper help you can
- Lower your monthly payments
- Reduce credit card interest rates
- Waive late fees
- Reduce collection calls
- Avoid bankruptcy
- Have only one monthly payment