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Save on Insurance.

Before you ever buy anything of value, know that someone somewhere will try to sell you insurance. Our goal here is to help you live in financial independence so that you won’t feel threatened by a company selling fear to get more of your money. The easiest way to save money on insurance is to be financially secure.


So, let's take a closer look at why this is the case.


Insurance is necessary and critical in many aspects of our lives, such as medical insurance. Recently, someone close to me racked up over $200,000 in medical expenses. Thankfully, he is better, and his good insurance means he owes only a mere fraction of that.


To discuss how to save money on insurance, we must first discuss risk. It's all about risk management, probability, and, at the end of the day, who owns the risk. It will be less expensive if you assume the risk. If you ask an insurance company to take on the risk, you will be charged.


Insurance is the "what-if" something happens game. What if I get into an accident? What if I get sick? What if...? Here is the thing. It's all about peace of mind. Watch any insurance commercial and you will see. They are trying to sell you peace in the event of a tragedy (minor or major). What are the odds that something major will happen in your life, compared to the odds that something minor will happen? These risk calculations are what insurance companies do, and we, as consumers, don’t always use logic but emotions to make these decisions, so the insurance companies can make a lot of money off your emotional fears.


Sadly, the fact that we are likely living paycheck to paycheck with little to no savings and the prospect of paying out of pocket for any incident is frightening. This, in my opinion, is the most important factor in why we make these emotional insurance decisions over logical ones.


So, the real way for us to save money with insurance is to attain financial peace and reduce our reliance on emotions. Having money and a fully funded emergency fund, therefore, brings peace. You just repair or replace something if it breaks. As you reach this point financially, you can start to raise your deductibles, which will save you money each month on expenses. In some situations, you never have to buy the insurance to begin with.


Can you see what I call the savings loop, yet? By having savings and being more self-insured, you save even more money to put back in your pocket. Better yet, you go a year or more with no minor incidents, and all the money that would have gone to an insurance company for nothing stays in your bank account. You might be thinking, "See, the rich do get richer." I say, "the peaceful don’t make fearful decisions."


Future Blog Note: The biggest savings in insurance is how you approach life insurance. If you are paying a lot for life insurance, we should talk about your strategy sooner rather than later. Connect with me.

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