When bad things happen
Ever stood at a door and wondered "Should I take an umbrella?" or perhaps its "Should I take a light jacket?" or maybe "Should I take a water bottle?". If it doesn't rain the umbrella is dead weight, if it isn't cold the jacket is extra weight that is unnecessary and if it isn't hot the water bottle is something taking up space. Choose right and you are a hero, choose wrong and you are inconvenienced.
Image source Dall-e
Guess what. Insurance is a similar call. Will you need it or will it just be an annoyance?
Now, Different countries have different rules and different opportunities. I say this to start because what I'm writing won't be of any use to many Hive Learners.
How do I know this? Well, a year or two ago I asked about credit cards in Nigeria in the Earn, Spend, Give community and the general consensus among Nigerian writers were: "They are expensive and pretty useless". Which surprised me because in Canada credit cards are exceedingly useful. Then I started doing a look at the different credit card offerings in Nigeria and after looking at the different credit cards I came to the conclusion.
I wouldn't sign up for any of them.
They were just very expensive, had very few benefits, and generally didn't offer nearly as much as I expect as a Canadian.
Why I love my credit card
Now if you look in my wallet you would find a number of different credit cards and each one has a very specific purpose. Just look at @crovisa posts and you will see that one of my cards is used for purchases and gives me crypto weekly that I invest into Hive. I get Hive just by buying things with my credit card.
However, right now I'm far from home in Indonesia. What can go wrong so far away from home? Well, all sorts of things! In this case being so far from home I look a all the "What If's" and there are a lot. I'll just look at a few of the though.
What if I get sick?
That's a big one. Indeed I was sick not too long ago and I kept thinking "Should I go to the hospital". Ultimately I didn't go to the hospital but if I DID go to the hospital my credit card gives me health insurance on vacation. I would have gotten free healthcare. Yes, I would pay up front but the credit card would reimburse all the payments. PROVIDED I follow all their rules, fill out all the paperwork etc. It's nice to know that I'm covered.
What if my laptop got stolen
That would suck losing my laptop. I wouldn't be able to post on Hive Learners! But the laptop is brand new and was purchased on a credit card. One of the perks? If the item is damaged or stolen within 90 days the insurance company will give me a brand new laptop. So.... Someone breaks into my hotel room and steals my laptop? Call the insurance company, fill out the paperwork, call the police and get police reports and I get a new laptop.
Why did I get a new laptop? Well, my old laptop developed an issue after a year and a half. I went to the computer shop and they told me the motherboard had an intermittent issue that would be very expensive to repair. My manufacturer warranty? Expired after one year. However, my credit card gave me an additional year warranty. I filled out the paperwork, filed receipts and they reimbursed me for a brand new laptop!
What if the airline goes bankrupt?
That happened to me in 2019. Wizz air went bankrupt and my flight from Reykjavik to New York was cancelled. I paid with the credit card and they reimbursed me for a new flight to replace the one that was bankrupt.
What if the flight is delayed or cancelled?
That same flight from Reykjavik to New York? Well I arrived in time but there was a hurricane so my connecting flight was delayed for three days! People were scrambling to find alternative flights, hotel rooms and so on. Of course the credit card got a phone call. I filled the paperwork and they paid for three nights hotel, all my food for three days, my taxi fare for three days, and even paid for things like toothpaste, clothes and other "sundry" items.
- Hotel burglarized? There is reimbursement
- Luggage is lost? There is reimbursement
- Lost passport? There is help available
and just for fun
- If I die in an aircraft accident? My wife gets half a million dollars.
Those are an awful lot of benefits to be sure. How much does it cost? Nothing. Those are all included benefits with my credit card.
Something I wouldn't touch in Nigeria is something I'd be foolish not to explore in Canada.
Other insurance is mandatory
However as much as I wish to pay less money some insurance is mandatory in Canada.
I own a rental condo and the strata corporation REQUIRES me to have tenant insurance. I own a house with a mortgage and the bank REQUIRES me to have property insurance. I work as a Pharmacist and to be licensed to practiced I am REQUIRED to have malpractice insurance. I want to drive my vehicle to work so I am REQUIRED to have vehicle insurance. Trust me those all become very expensive but I also have no choice
Some insurance I feel obligated to carry
Now life insurance is something which I think is very important at some times and a rip off at other times.
Let me explain.
When I became a father over two decades ago I looked at my wife and infant son and I thought to myself that it was important for me to work hard to make sure my loved ones had a secure future. I had a good profession, I worked hard, I made good plans, I spent wisely and prayed regularly. If everything went as I expected it to then all would work out well.
However, what if I died? If I died how would my wife work and still look after the children? How would she manage to make enough money to send them to school, university and generally provide for them? That's why I looked into life insurance. I needed to know that if something happened to me my planning would ensure that my wife and children were taken care of.
Total cost: $15/month. That is about the price of two Big Mac meals at McDonalds. Yes it is a monthly expense. Yes it is money that I could spend or invest on something else. However, for me it was a small price to pay to make sure that if something happened to me I would still have provided for my wife and children.
However, once my children turned 18? I had already saved money for their University. If I died both of my children would have their education secured and be able to find good jobs on their own. My wife has a pension and a good job so she would need no financial support from me if I died. At this time I still have insurance sales people call but I just politely tell them no. I simply have no need of life insurance anymore. The very same thing happened when my current wife was new to Canada. An insurance salesperson told her she needed life insurance! She asked me and I scoffed. I told her... you have no children, you have no one depending on you, if you die no-one is looking to you for support. You have NO need for insurance.
Everyone has different needs
In the end it comes down to how much is it going to cost to buy peace of mind. How much do you need to pay to take care of a problem in case something goes wrong.
Then it becomes a numbers game. I love running the numbers but many people do not.
Still... if it is insurance that costs me nothing? I will absolutely take it.
If it costs me money? I weight how much it costs VS the likelihood of something going wrong.
... but here is something to remember. Insurance companies aren't in the business of losing money. If I buy health insurance for myself it is often cheaper to invest that money myself to have it sitting there when something goes wrong. If I buy health insurance for my pet it is often cheaper to just invest money every month for the time he will need veterinary care.
But sometimes peace of mind and removing risk from the future is important...like with life insurance.
And sometimes I'm forced to buy the insurance. Then its my mission to find the absolute cheapest insurance that gives the coverage I need.
...In the end its a personal decision. Some people have no money for insurance. Some people would be better served with a healthy diet and exercise than buying health insurance. However, if I was to give one firm piece of advice it would be this: do some planning, look at the offer and then run the numbers. Run the numbers carefully and see if it makes sense for the protection you get. Insurance salesmen can be pushy and sell you something you don't need so run the numbers. Then again, I paid $2,700 in premiums over 16 years to ensure that my wife and children were covered in case of an untimely death...I never collected a penny of that back...but for the nights I slept well knowing that my family was protected I consider it money well spent.
That's my take on the Hive Learner post. I know it doesn't fit everyone but thank you for reading this far and as always I love getting feedback :)