A Small Saving With Insurance Premiums - What It Really Means |
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May 25 - Why should you shop around for the cheapest insurance, what difference could it possibly make? Perhaps you could save R30 a month or R1 a day by finding a more affordable premium, but how would that help your financial situation down the road? The answers might shock you. Let's say you moved your car insurance policy from a traditional insurance company that your insurance broker found for you (and received a kickback for his efforts), and transferred your coverage to a cheaper direct insurer like Dial Direct. And let's be very conservative and say the savings were only R1 a day as a result of that switch. If you invested that R30 a month in a tax-free investment for your retirement and continued to salt away R30 every single month in 30 years time you would have a nest egg of R67,815! We've assumed a small growth rate of 10% per annum, and you could probably get a bigger retrun than that, but even at that attainable rate you would find that R30 a month was now worth R67,815. But imagine that Dial Direct saved you a little more - say R123 a month in total. At the same rate of 10% you would have over R250,000 saved up 30 years down the line. We tend to think about money with a short-term perspective, and we also hate to plan for unexpected costs in the future. Make sure you have the right insurance, and that you're not paying too much for it right now. Take the money you would have spent and put it away for your retirement - it will suprise you what a difference it makes when the time comes for you to retire. Related Insurance Articles: * Expensive SA Inusrance Myths - Part 3 of 3 * How To Shop For Car Insurance In South Africa * Another Costly SA Insurance Myth - Part 2 of 3 * Expensive SA Insurance Myths - Part 1 of 3 * Learn How To Lower Your Premiums * Santam To Launch New Home Insurance Product * Insurance In South Africa Set To Become More Affordable * Dial Direct Discusses How Premiums Are Derived 
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| 3/14/2010 7:04:52 AM | |||||||||||||||||||||
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