People are often looking for ways to stop spending so much money on insurance. One of the best ways to lower your monthly payments is to increase your deductible. It’s true, you do spend less each month. But you still pay for that higher deductible with your own money. So which is better? Having a low premium or a low deductible?
There’s really no right or wrong choice. It all depends on you, on your financial condition, on your family status, even on your overall health. You have to pick that which best suits your needs.
Deductibles vs. premiums
There are many types of deductibles. They range from a few hundred dollars to as much as several thousand dollars. Each deductible amount is connected t a premium payment amount. The rule is simple, and I mentioned it earlier: the higher the deductible, the lower the premium. And vice versa.
What you, the insured, need to do is determine the best deductible/premium level for you. First, consider how much you can afford to pay in monthly premiums. No one wants to pay thousands of dollars for a deductible, but that premium that can bring you the lowest deductible possible might just be out of your reach. You have other monthly expenses to think about as well, without having to worry about your insurance premiums.
Also, don’t forget to take your health into consideration. The deductible amount of a health insurance policy is the amount an individual must first pay out of pocket before the insurance company begins covering costs. That high-deductible/low-premium policy might look good at first, but if you get sick and need hospitalization, having to pay for that high deductible will cause you even more problems that you certainly don’t need.
Be smart when you go looking for insurance and make sure that you cover every aspect there is. Only then will you really start to save money.