Spaghetti squash and insurance
Have you ever eaten spaghetti squash? My one daughter loves it. So naturally, when she came to the grocery store with me last week, she pointed them out and asked if we could get one. She was keen enough to see the price and thought it was a good deal. I pointed out the price difference of organic vs. regular spaghetti squash, chose one and we were on our way. After we went through the till, I scanned the receipt as I always do, being analytical, and commented how the spaghetti squash was $12.76. She twisted her head and looked up at me confused, saying, “but it was only supposed to be about $3.” Just then I realized that earlier she was only looking at the price per pound to make her decision. In innocence, she had not factored in the weight of the spaghetti squash into her calculation. Funny enough, this got me thinking about life insurance and how the price can differ over time. Often, people are making decisions without full knowledge that you gain at the till. Frankly, that can hurt the ego and wallet a lot.
A few years ago, my firm had done insurance audits for a dentist and her family. They had 11 different policies purchased over time, mostly through a family member. Our audit process checks approximately 40 different items for each policy and at the time we pointed out various areas of consideration. One of those was about looming price changes to a few policies. The client acknowledged this at the time but had other distractions in life, so did not take any action. During our regular reviews, we would bring it up, but they deferred addressing it due to competing demands. Guess what? A couple of months ago, the price changed on two policies, and they noticed the impact big time. Now they were interested in learning more about how to calculate the insurance cost. Shall we say that they had gotten to the till?
The comparison of shopping for spaghetti squash is not all that different from insurance. The labelled price may be totally different from the total price. In a grocery store, cost labels can be per item, per pound or per kilogram, etc. You need to do some math in the process. Once you add deals and discounts into the equation, like buy one, get one free or Air Miles, you need a little more math. When was the last time you pulled out your insurance policy and reviewed it?
Now, my client is sitting at the insurance till, shuffling things around to see if she can keep everything on the list. Have you ever been there before? She is debating about dropping coverage, replacing coverage with a cheaper alternative (but has a health concern since the other coverages were put in place) and of course simply keeping it. I encourage you to price compare your policy and review what you really need or want before you get to the till. There will be less pressure and more money in your pocket if you do. If you need help in the process, ask the people in the insurance store to help you find what you need. Depending on what you’re looking for you can ask the person stocking the shelves for help. But if you’re still not satisfied, ask to speak to the manager. The insurance world is no different, with insurance advisors and insurance specialists.
Steve Meldrum B.Mgt. CFP CLU is the founder of Swell Private Wealth Ltd. For over a decade he has specialized in helping individuals and businesses expand protect and perpetuate their wealth. For further information or tailored advice, contact him at 403-487-0490, steve@ swellwealth.com or connect on social media