Many older people who are feeling financially squeezed are over-insured, or they are paying premiums for insurance policies that make no financial sense. By canceling these insurance policies, which rarely have any cash value, and stopping the premium drain they may save hundreds of dollars that could be used for things they really need.
Only the owner can decide whether it makes sense to walk away from an insurance policy. However, an annual review is always an excellent idea. Start with these kinds of policies, which most seniors find that they really don’t need:
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If you have always felt that the amount of money that insurance providers charge you for their service is unfair, then you might find some albeit little consolation in the fact that you are not alone in feeling that way. Most insurance policyholders, as it turns out, feel that the amounts of money they pay to their insurance providers is perhaps unfairly on the higher side, and wish there was a way through which they could reduce their insurance premiums; of course without compromising on the level of coverage the policy offers.
Luckily, there is a way through which you can lower your insurance premiums: namely by reducing your risk profile.
To understand how lowering one’s risk profile can help in reducing one’s insurance premium rates, we would first have to take cognizance of the very basic fact that insurance is meant to provide a hedge against risk, that is, a safety tool taken by the policyholders to ensure their continued financial well being in the event of their suffering whatever risk it is that they are taking up insurance against. This, therefore, means that the insurance providers are basically in the business of providing risk management services. And for any particular risk that they provide cover against, insurance providers are likely to meet people who need the risk management service they offer at ‘greater levels’ or to greater extents than others. So the way the insurance providers price their service is such that those of their customers who need ‘more’ risk management are commensurately charged more the risk protection that the insurer offers them, with those who need relatively ‘lower levels’ of risk protection – that is, those who are at less risk of suffering from whatever event it is that they are taking insurance against, being charged commensurately lower ‘fees’ for the service, in terms of insurance premiums.
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We know that we regularly pay the insurer. You may be asking what specifically an insurance premium is.
Insurance could be called prospect care. In the past, cultures discovered that accidents like fire or events like robberies could produce huge losses of both material goods and way of life. In addition, they knew that if a person passed away, their surviving dependents may no longer have a way of being supported.
The earliest type of insurance existed to basically help others, knowing that they will do the same if a similar event were to happen to you in the future. For instance, if there is a fire that burnt down your neighbor’s home, you would help them rebuild it. Community members who would not pitch in and help could not count on others to provide help to them.
It is possible, of course, that you may never need help. You have wasted your time, if that’s all you have. Likewise, you may think an insurance premium is wasted if you don’t ever have to file a claim.
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