Even though we don’t pay too much attention to them, insurance policies are playing a very large and important part in our lives. Without this safety net spread below, facing various challenges like accidents and disasters would be much harder. With that in mind, though, we would like to point out that, even though they are all made with some beneficial purpose in mind, not all policies benefit all types of users.
As a matter of fact, in some cases, the premiums you are paying far outweigh the benefits you get from the product. Let us take a look then at some of the ways these costs can be optimized so you can enjoy a good level of protection without actually wasting money.
Compare the different insurance carriers
When you look at it, the insurance policies are really no different from any other type of products you are purchasing every day. And when you buy these products, you usually take some time to compare the prices, check online reviews, and, if necessary, find some more affordable alternatives. Since a large portion of insurance policies are sold through referrals, bundled packages, and renewals the insurance companies are counting that you won’t show the same level of diligence with their products. So, before you sign up for anything, be sure to see are the other insurance companies offering something better.
Leverage the clauses of different policies
In other words, your goal should be to inspire the confidence that you aren’t going to make any kind of claims in any foreseeable future. This can be best explained in the example of life insurance. If we, for example, take a look at the tobacco users, we will see that their life insurance premiums are usually considerably higher than non-smokers’ since they are negatively influencing personal health on a daily basis. Also, the persons that sign up for life insurance at the age of 30 will pay far lower premiums than the persons above the age of 40. Such price variations can be found across the entire industry.
Maintain a good credit rating
This may not be one of the primary deciding factors (unlike, for instance, previous claims), but most insurance companies will check your credit rating before making a final decision on the insurance premiums. If your credit score is poor, the insurer will require greater compliance assurance in the form of higher premiums. That is why it would be a good idea to clean up your credit history before you apply for any kind of far-reaching and expensive insurance product. In most cases, though, you will be able to control the damage with consolidation and keeping the credit utilization at only 30% or less.
Make sure you are not paying for junk insurance
If you are not familiar with the term, junk insurance describes the insurance policies that are sold without the explicit consent of the insurance user or the products that can’t be claimed in any sensible scenario so they hold no or very little value for the purchaser. These add-ons are usually sold as a part of bundled insurance policies so the user has no chance to assess their value. Of course, this practice is considered highly unethical and you are eligible to file for junk insurance refund. Since these cases are usually very sensitive and require good legal background we suggest that you look out for professional help.
Combine policies and pay in advance
Last but not least, we would like to remind you that, in a certain sense, insurance products are not that different from loans. So, if you put several insurance products under the same policy the insurance company will be willing to give you a discount on the combined price. Also, due to the nature of their industry, the insurance carriers are in constant need of liquid funds. Most of them will be more than ready to offer various discounts if you pay the installments for, let’s say, six months in advance. Keep in mind, though, that all these discount options need to be made a part of the insurance agreement.
So, there you have it – five ways that should help you to lower the price of the insurance products you are buying and make sure you get the optimal level of protection for the money you invest. The most important thing to remember here is that insurance makes an incredibly important part of our lives and you don’t want to deprive yourself of anything that could ensure the wellbeing of you and your family. That is only a reason to pay attention to where your money is invested and pay only for the things that could actually make a difference.
Written by Mike Johnston