How do you keep insurance inexpensive?
“You’d get very rich if you thought of yourself as having a card with only twenty punches in a lifetime, and every financial decision used up one punch. You’d resist the temptation to dabble. You’d make more good decisions, and you’d make more big decisions.” This is Warren Buffet’s advice on investing.
What if we extended this analogy to insurance? What if there were limits on how much you could spend on insurance each year? You would be more thoughtful and diligent in buying insurance. You may not buy that extended warranty on your motor insurance and perhaps spend more time reviewing your insurance policies.
We think of insurance as an investment when it really is a tool to manage your financial risks.
We overlook the fact that insurance companies make billions from customers each year. For every Rs. 100/- of motor premium, roughly Rs. 70 pays claims, Rs. 25 pays expenses of the insurance company, and Rs. 5 is the Insurer’s profit.
Here are 3 quick tips from insurancepe:
- Always have Voluntary Deductible on your Motor Insurance.
- Do not buy the wrong kind of Life Insurance with unnecessary and expensive annuity riders. We recommend Term-Life insurance.
- Do NOT buy insurance just because it is cheap or inexpensive. Just because something is cheap does not mean it meets your needs.
We’re aware that “money doesn’t grow on trees” – It’s time we started acting accordingly with our decisions on insurance. Insure for financial catastrophes and self-insure the rest.
This blog post is brought to you by the minds at insurancepe!
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