How to Cut Insurance Costs, Part 1
How to Cut Insurance Costs, Part 1
Our society has become dependent on the insurance industry. We may not approve but there is nothing we can do about it. Hopefully, you will all be very healthy, your house will never burn down, you will be a safe driver, and you will live to be 100 (at which point you will be ready to go). Insurance was created as a gamble. That is, you are betting that something is going to go wrong and the insurance company is betting that nothing will go wrong and they will get to keep all your years and years of payments without having to ever pay out anything. So far, the insurance companies are winning as illustrated by their good profits. However, let’s not give them more than we have to.
Life insurance is usually necessary for the younger working couple with small children. Even if both of you work, if something happens to one of you, will the other be able to make a high enough salary to raise the children? However, once the children are grown, this insurance should not be necessary as the remaining spouse should be able to support him or herself. If you are from a one-income family, then you will probably want life insurance until that bread winner dies in order to support the unemployed spouse. Thus the two income family needs only term life insurance that lasts only up to a certain age. Yes, the insurance company gets to keep all of that if you do not die before you are say 45, but the rates will be much lower for you. Whole life insurance will be more expensive as it lasts until you die which means that eventually the company will have to pay out. It would be ideal if everyone started investing at a young enough age that, should something happen to one spouse, your portfolio would be sufficient to take care of the family. But this is not mentioned to young people today. You should look at what you currently have for life insurance and adjust it to the correct policy for you. And as with most things you purchase, shopping around for the best price among the different companies can also save you quite a bit of money.
Most importantly, concentrating on paying off your debts. If something does happen to you, your insurance money could be totally eaten up by creditors who will collect what is owed them before your family is taken care of. Paying off all of your creditors, even after you are dead, will not help in the daily support of your children you leave behind. So if you want life insurance to protect the future of your family after you are gone, pay off your creditors first or they will be the ones to benefit from your life insurance.
Medical insurance is also considered necessary today. Not so long ago, if you became ill with cancer, there was very little that could be done about it so your family took care of you until the end. Today, the majority of cancer patients (if caught early enough) will survive through the use of specialized treatment and drugs. And these treatments and drugs are very expensive. Therefore, unless you were on the ball and started investing at a young age or for personal reasons do not wish to go through such treatments, you will need long-term medical insurance. Again, assuming that you do not have a large financial portfolio, you will need day-to-day medical insurance to cover the usual appendicitis, broker bones, etc. Because so many people have no qualms about going to the doctor or the emergency room every time they have a head cold, insurance costs have sky-rocketed. However, usually it will still be worth your time and effort to research the different companies available in your state to find the lowest priced health insurance.