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Old 29-12-2017, 09:52 AM   #1
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Join Date: Nov 2014
Posts: 1,789
Why I regret spending too much on Insurance

I was watching a fb live feed on insurance and investment recently. There was an analogy by one of the speakers which struck me hard

He said :
Buying Insurance is just like buying a fire extinguisher for your home. It is a required protection. However, at times, we get so overly caught up with the features of this fire extinguisher rather than the original intent of getting it (which is to put out a fire) . The sales man will tell u that if u buy a more expensive fire extinguisher, it will have additional functions (such as LED lights, smoke alarm etc.).

So there you go shopping for fire extinguishers and upgrading ur fire extinguishers as new models start appearing... Spend a fortune on it.

During your house warming, will you open your store room and say to ur guest 'Look at all the wonderful fire extinguishers I bought'... I don't think so rite. Instead what u would want is to renovate your house nicely for your guest to enjoy.

Similarly with insurance, we should be looking at the essential protection that we need to put out the fire.

After hearing this, it dawned upon me, why spend so much on insurance when u can use this additional savings to grow your retirement funds /save? As long as the fire extinguisher serves its main purpose, it doesn't make sense to pay so much more for it.

And to those who feels that term plan is a waste of money as there is no cash returns.... Think about it in this way. When you buy a fire extinguisher for $10.... Will u go to the shop after the fire extinguisher life span is over and say 'hey I did not use this extinguisher.... For this I expect to trade it in for $30'

To my friends who have just started planning for their protection needs, it's a food for thought.

Last edited by blurpandasg2014; 29-12-2017 at 12:11 PM..
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