When it comes to arguments between my wife and I, I never win. Obviously.
It reminds me of the Serenity Prayer. This basically states I should accept the things I cannot change. And one thing I cannot change is winning when it comes to arguing and my wife. I don’t know how she does it. But she does.
And after 26 years of marital bliss I realise the reason for the bliss is that not once have I won an argument. Not even a tiny one. I often wonder why I bother. But I do in the hope that someday, someday I will win. But someday never comes leaving me in a vat of despair.
When it comes to insurance it is the same. You know insurance companies are in the business of making profits. You know they are in the business of collecting premiums and we all know they will do whatever they can to not pay a claim because they are not in the business of giving money out.
And just like that we get enticed. The insurance companies spin their web. They seduce you, cajole you, manipulate you and hypnotise you to do things you may not normally do. And then 20 years later you wake up from the trance and try to operate on your terms only for mother nature to throw a spanner in the works.
Ok, I know what you are thinking. What the hell I am going on about? And what does my wife and insurance companies have in common. And why should you care?
Well, in the last year we have had several claimants for Trauma insurance. And in total people have lost well into seven figures. That’s enough to buy many shiny things that twinkle in the light.
Or in my case a couple of shiny cars.
So, what happened?
Well, financial planners tell us to take these insurance policies out and we do usually when we are young. What we do not realise is that as we get older the premiums start to increase. Then they skyrocket.
For medical professionals it gets worse. Because they usually have large cover which means the premiums are a bit high too. And when high premiums skyrocket you really notice it. And that is the point they are still healthy enough not to feel they need so much cover.
Then in our wisdom and stupidity we reduce the cover to manage the premiums.
And that is when we get sick and start making claims knowing we have lost tens of thousands. It happened to me. I reduced cover to save premiums and 6 months later I was $80,000 poorer. A client of mine reduced his cover and 11 months later he lost $200,000 (ouch). And I have had others who cancelled the entire policies and wished they had not.
If losing $80,000 was not bad enough I then lost the argument with my wife. I could not argue and say much when I was told that my stupidity cost her numerous shoes with red soles. Apparently, you can only get them from a store called Christian Louboutin but I found some on Ebay which led to more arguing which I lost. Again.
Anyway, my logic was that in the event that anything happened to me all I wanted was enough cover to cover my loans. On payout this did more than that but to be honest I would rather have an extra $80K laying around.
But we have had instances with clients where cover was lowered when there were still excessive loans outstanding. Losing $200,000 when you have a $1,000,000 in loans is painful. It can lead to a bath full of crying. And enough alcohol drinking to empty a brewery.
The moral of the story is this. Trauma insurance for most people is a must. When you have loans outstanding you want to maintain cover that at least covers the loans and ideally a bit more. When the premiums start to skyrocket think twice before you reduce cover.
And always remember the insurance companies always win. Pay the premiums and you feed their pockets with cash. Lower the cover and you feed their pockets with cash. It is useless to even try to outsmart them.
And that is where bliss is. Knowing you will not win but at least you have enough cover to cover your loans and a bit more for the finer things in life.
