Lack of understanding can cost you big time!

Do you understand insurance? Life insurance? Auto Insurance? Health Insurance? I know that it is certainly NOT the most interesting subject in the world, but if you do not take the time to truly understand these products, it will cost you big time.

Rules for purchasing insurance:

  • Do not just “take an insurance agent’s word for it!” Truly seek understanding of the product! If you understand it, you will be able to make a good purchase that you will KNOW is a good purchase.
  • If you are speaking with an insurance agent, and you start feeling like you are being “sold” on a product – LEAVE IMMEDIATELY!!! Use Donald Trump’s words – “You’re fired!” Complete with the New England accent if you wish. You do not need to be sold on an insurance product, you need to understand the insurance products. Once you understand the products, you will be able to make a sound decision.
  • Obtain at least three quotes from three different companies. Ensure that at least one is an independent company that is able to surf your insurance needs among many different companies. Competition makes prices go down. When prices go down, you will get to keep more of your money.
  • Do not cancel an existing insurance product until you have obtained a replacement. Do not cancel your auto insurance before you have obtained auto insurance from another company. Do not cancel your life insurance before you have obtained alternative life insurance from elsewhere. A gap in coverage is ripe territory for Mr. Murphy to show up.
  • Do not allow your insurance to be combined with another financial product. For example, cash value life insurance is both life insurance and an investment in one product. The problem with these types of products is that the fees are tremendous. Purchase your investments and insurance separately.
  • Send out your insurance occasionally for quotes. You want to ensure that your rates are remaining competitive with the open market.
  • Ask for a better deal. Insurance is a service product. Service products are negotiable.
  • Be careful of purchasing insurance from a family member or a good friend. You may have your judgment impaired because you really want to please and help them.

Again, a boring subject. If you kept reading all the way to the end of this article, I am impressed! You can save a lot of money on insurance by employing these tips.

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