hi I'm Brett Rosley thanks for joining me today today's hot topic is three
insurance mistakes you want to avoid making and how to do that first mistake
that people make is they have too low of a deductible on their insurances I find
this troubling as insurance companies are reaping all the profits that you
should be keeping in in your own pocket and let's use auto insurance as an
example many people I know have a low insurance deductible for their auto
insurance some have 250 some have $500 and they pay a premium to have that low
of a collision insurance deductible well the problem with that is let's say you
do go in the grocery store parking lot and I think it's probably happened to
everybody at some point you back up and you didn't look as well as you should in
a little fender-bender you're bringing in the auto body shop and you get the
estimate and with your 250 deductible you find out you have a $600 claim do
you make the insurance claim for 600 bucks you're on the hook for the first
250 but what I found is a lot of people won't make the claim why do they not
make the claim when that's why they have insurance well as you might guess the
reason they don't make that claim is that they're gonna save to a fifty bucks
but they know that if they make the insurance claim what's going to happen
or their premium next time they're gonna get an increase so I said okay I'm just
gonna eat this cost I'm not gonna tell my insurance company and therefore my
premiums not gonna go up they're gonna think I'm the best driver ever what are
you doing with the 250 deductible same thing goes if you deduct opposed five
hundred bucks on your insurance there let's say you have a $900 claim because
you have a nicer car cars get more expensive to fix it's more than just the
bumper maybe it's a little bit more of a side panel gets hit well now you have a
$900 claim your insurance is $500 deductible
do you make that claim for 900 bucks knowing that's your look for 500 the
insurance come to pick up 400 but now you have a claim on your record what's
going to happen to your premium it goes up so what I found as many people are
paying a higher premium to have the low insurance deductible and then they don't
use it when they have a claim so I would suggest you have a higher collision
deductible let's start with $1,000 if you have $1,000 dr. Boyer and your car
insurance you'll save money and premiums every six months when you make your
premium take that money take the premium savings and bank that somewhere so that
when you do have a fender better you'll have more money to go ahead and pay the
claim mistake number two is a similar concept with your medical insurance we
all know that medical insurance rates are skyrocketing and I don't see that
stopping anytime soon for years people with low deductibles on their medical
insurance two or $50 $500 $1,000 even and what happens again is that low
deductible translates into a very high premium that you have to pay every month
well I'll use myself as an example on how I think is the best way to structure
your medical insurance I was with Blue Cross Blue Shield for many many years
the premiums jumped and jumped and jumped every year Toby came unaffordable
so I kept looking into it more and more and I increased my premium I'm sorry I
increased my deductible from $1,000 to $10,000 when I tell people I have a ten
thousand dollars a oh my gosh that's a lot well it is a lot but guess what my
premium every month went down $500 a month that's a lot of money when you
don't have a lot of claims I have a family of five I've got three children
and a wife we're all pretty healthy but when I have a year where I don't have
many claims which is most years the insurance company doesn't give me any
money back they keep that and they use it for other people's claims so what
I've done by increasing my my deductible from a thousand to ten thousand
I've saved 5,000 I'm sorry $6,000 a year $500 a month times 12 months and I
banked at $6,000 in premium savings and I used that money actually putting a
special bank account called a health savings account which gives me a tax
write-off for that amount each year but now when I do have claims and I'm on the
hook for the first 10 grand I've got $6,000 in premium savings to
sit there and pull from when I don't use it it rolls over whatever I don't use
and I do it again the next year I have more information about this health
savings accounts and other videos and blogs but my point is I keep more of my
premium money and I raise my deductible my third mistake that I find some people
make is regarding life insurance life insurance is different than every other
type of insurance in that you expect to have a claim you will have one claim per
person with life insurance with your automobile liability expected never have
a claim same with your homeowners fire insurance you never expect your house to
burn down life insurance is one death one claim per person you're going to
have the claim unfortunately most people don't have a claim on their life
insurance because they drop their insurance before they die despite that
term insurance or temporary insurance is what most people in America should have
they should have that because it's extremely inexpensive as for the use if
something happened to them and they died while they still had dependents that
needed access to a large sum of money some of money to pay their monthly bills
or to pay off debt however for those people that have a little bit more money
and can afford it I believe the way to go is with permanent insurance of which
there's many forms the different forms there's there's a number of things to
choose from there and this is not the time to go in all those different types
of permanent shirts however in my perfect plan for your retirement what
you'd have is a plan that allows you to spend all your investments your IRAs
your 401 k's your taxable accounts and the asset that you would leave to your
spouse or your beneficiaries would be income tax free death benefit
from your life insurance so you have life insurance while you're young and
your dependents need the lump sum death benefit to pay off liabilities and
provide income but then at retirement you would use that insurance to be the
ultimate asset transfer vehicle because it's income tax free and available the
exact data here when you die thus freeing up you'll be able to spend and
enjoy all of your lifetime savings for retirement you can read about this on
other blogs of mine on my website life planning today comm and also you can see
them on Brad Rossy calm and I will be creating videos on this very subject
both the subject of retirement planning and of how to use your life insurance in
more detail so please subscribe to my video today and follow me on my blog
sites as well thanks for listening have a great day