One of the most common questions that people tend to ask themselves when shopping for insurance is whether cutting their rates will actually save them money, or just end up costing them more money down the line in case their insurance needs to be used for something. There is a chance that you will need additional coverage in the future, but there is also a chance that you could overpay and never need all of the policies that you are paying monthly for.
The answer to your question depends on many factors, and can even vary based on what kind of insurance we are talking about. For example, more than five million people get into a car accident every year. Odds are that you will find yourself in a situation where you need to use your car insurance at some point as a result, so it is necessary that you have the proper coverage for when this happens. However, lower rates do not always mean that you are not properly insured, as multiple companies can offer you similar coverages for drastically different prices. This is why you can look to cut your rates, even on auto insurance, while still ensuring that you are properly insured.
Another option that people tend to look at in order to cut their insurance rates is to increase their deductible. By doing this, your monthly rates will undoubtedly be lowered. However, doing this also can lead to added stress when you need your insurance to cover something, as you will need to put down a significant amount of money before your insurance agency will even look at your claim.
To simplify things, you will need to view your individual situations for all kinds of insurance carefully before you make any decision. The primary goal should always be to be covered for all realistic scenarios. Once you know what you need to be insured for, you can look to cut rates within those confines with no concerns.
The biggest misconception is people thinking “it won’t happen to me” but statistics state there is a 3 in 10 chance of suffering from a disability that will keep you out of work for 90 days or more at any point in your career. Another misconception is thinking they can rely on government benefits, but a majority of long-term disabilities are not work-related that won’t technically qualify as worker’s compensation. Social security benefits only pay an average of $1,100 per month.
Workers also believe that employers will offer disability coverage but 70% of private employers don’t offer long-term disability insurance. It’s best to research disability insurance plans to find what is best for your needs and budget to ensure you have a stable emergency fund if you have a major medical accident.