disability

Dimes for Sale: 8 for $1!

photo shows a stack of 8 dimes

You may never see an offer like this. No one would buy, right? It is too obviously a bad deal.

But people get tricked into doing essentially the same thing, all the time. Buying insurance you do not need is a lot like buying dimes, eight for a buck.

A recent retiree told us about being offered “Medicare Supplement Plans” where the one that had a potential $180 per year exposure to deductibles was $250 cheaper than the one that featured full coverage. The agent said most people prefer the “better” policy, desiring full coverage. But when you think about it, why pay $250 to save $180?

Another told us of a proposal to buy long-term care insurance, which sometimes makes sense. But this person supported a lifestyle that already cost more than long-term care, a lifestyle whose expenses would disappear if the need for home care or assisted living or long-term residential care emerged. A more expensive lifestyle would disappear if the cheaper long-term care lifestyle came into play. No coverage needed!

These thoughts came to mind as I cancelled a disability policy into which I had faithfully paid each month for forty years, one that would have provided needed benefits when I had large family obligations and little in the way of other resources.

Insurance is a marvelous invention. We believe in buying all of it that you need—and none that you don’t.

Otherwise, you’re buying dimes, eight for a buck.

Clients, if you would like to talk about this or anything else, please email us or call.


Want content like this in your inbox each week? Leave your email here.

Play the audio version of this post below: