Do your sums before securing any type of Insurance

| January 8, 2013 | 0 Comments

Do your sums before securing any type of Insurance

Unfortunately many of us don’t spend a great deal of time or in fact any time when doing homework prior to taking out an insurance policy. We tend to pluck a figure or figures out of the air, we tend to use what are known as ‘ballpark’ figures and rarely if ever get precise when making a calculation. This might be okay but in many cases it means you are paying too much. Paying too much to an insurance company means you have less disposable income and the name of the game is to increase not reduce the amount of money you have to enjoy life and to build your financial future.

So the nitty-gritty of the situation means that you should use a calculator and get serious when it comes to doing your financial homework. Here is the scenario. You have decided to take out some personal insurance, some income protection and certain life cover. You need to calculate the amount of money you need should an accident or worse ever occur. Simply saying you need about X dollars is not good enough. It’s certainly not good enough if you under calculate because being unable to work due to an illness or accident but having a far smaller income through your insurance cover then you would get through your salary could be more than embarrassing.

But on the other hand insuring yourself for an amount way and above what you need or require means that you are shelling out your hard earned cash unnecessarily. You don’t have to pay the premium for a cover which is way in excess of what you need hence the suggestion, the not-so-subtle hint to, that you get out of calculator and get serious about your financial needs.

One way to tackle this is to make a list of all your expenditure for the previous 12 months. This means everything from car expenses, mortgage payments, school fees for your children, social activities including birthdays and holidays, presents, superannuation or pension plan payments and of course the basics such as power, clothes and food; and food can include dining out as well. Only now with this detailed list of your expenditure over a period of 12 months can you have a genuinely believable financial statement. Now you are in a position to list the amount of cover you need with your income protection and/or life insurance cover.

Don’t leave it to chance, don’t make a wild guess and do take the matter seriously. If you under estimate your financial requirements you could be seriously embarrassed and if you over estimate your financial requirements you are paying the insurance company too much possibly even far too much. Make sure you know exactly how much cover you really need.

When it comes to securing personal insurance, ensure you are making all the right financial decisions. Choosi compares insurance for a range of different policies and can certainly take the hassle out of obtaining the necessities in life. It costs nothing to use their service.

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Category: Finance

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