4 ms·

> rafts of expensive insurances that middle class people often insist on Could you explain more on what you're referring to when you say insurances?

iNate2000 12y ago
car insurance, home insurance, fire insurance, life insurance, health insurance, legal costs insurance...
noonespecial 12y ago
Health insurance for starters. Poor people will likely have a (mostly less than sufficient) government option that they pay little for, hoping that they don't get sick. Then comes the mandatory insurances of "ownerships". Mortgage insurance to cover loan default, required property insurance for that home, auto insurance (full coverage also required by your lender on a new car) etc. Fearful insurances like disability insurance to cover the bills if they should become unable to work (wouldn't want to lose all my stuff). Life insurance so the kids have a comfortable life at the level they've become accustom to in the even of death etc. There may also be liability insurances connected with their line of work. Middle class people have a lot of insurances that often take a significant portion of their monthly budget.
- chrisBob 12y ago
  I agree except for life insurance. Most life insurance (at least a whole life policy) is a way to pass on wealth tax free, rather than a real insurance policy.
  - grecy 12y ago
    And why would you want to do that? You're assuming that passing on wealth is a good thing, implying that it will make your kids happier. In all honestly, when my parents pass, I genuinely hope they've spent every cent of what they earned in their lives and my brother, sister and I wind up with nothing more than photo albums. They worked their entire lives for that money and I want them to spend and enjoy that money. I can earn my own.
    - Jtsummers 12y ago
      I would like the same for my parents. But I choose to keep my employers life insurance because it's cheap (about $100/year) and between it and my savings will more than cover both my sister's and my parents' current debt (mortgages). Should I die suddenly, they won't be happy but the cost to me is negligible and the benefit to them is great. Once alleviated of the debt and annual expense they'll all be able to retire a little bit earlier or a little more comfortably. Sure I don't get anything out of it, I'm dead, and the money won't bring me back. But it will bring them some financial peace. Now, if it were more expensive I might have a different view on it. I certainly have no intention of buying more life insurance until I end up with actual financial responsibilities (spouse, kids) that would more obviously need the money in my absence. EDIT: Word choice, I slept better last night than I have in months, but it's still not enough. Sleep deprivation wrecks my ability to write.
- grecy 12y ago
  To give a concrete example to artmageddon - I drive a $450 car so I have the absolute minimum insurance on it required by law. Even after only one year of not paying for full comprehensive, I will save money if it gets stolen or burns to the ground and I walk away. (I do have high third party - so if I hit a Porsche, damage to it and people is covered). I pay $300/year for the car insurance I have. I currently don't have any kids, so I've opted out of Life Insurance at work, instead getting more money into my bank account. In all honestly my savings account would cover my funeral expenses, so why would I want my family to get $250k in the event of my death? It's not going to make them happier. I also opted out of the health insurance at work, so I get a bigger paycheck. I'm 32, fit and strong, and I can count on one hand the number of times I've been to a doctor in my life. Obviously this circumstance will change as I get older and have kids, and I'll re-work my approach. EDIT: I live in Canada - basic health care is more than good enough.
  - ryandrake 12y ago
    You opted out of health insurance??? Obviously I would never wish a freak traumatic accident or sudden debilitating illness on anyone, but should one happen to you, please post back here about how those slightly bigger monthly paychecks worked out for you.
    - brightsize 12y ago
      Anecdote: my brother, who IIRC was unemployed at the time, chose not to purchase even a catastrophic plan, under the theory that he was perfectly healthy so why should he? Then one day, out of the blue, horribly sick, with intense abdominal pain, almost unable to walk, he had to be taken to the emergency room to have his appendix removed. The bill was something like $17K and he paid all of it out of pocket. He was in his 30s and I think a reasonable catastrophic policy would have cost a couple hundred $ a month and would have, in this case, saved him $12K or thereabouts in hospital bills. This was just for an appendix, something more serious could have wiped him out financially. It's crazy not to have at least a catastrophic health insurance policy at any age.
      - 12y ago

iNate2000 12y ago

car insurance, home insurance, fire insurance, life insurance, health insurance, legal costs insurance...

noonespecial 12y ago

Health insurance for starters. Poor people will likely have a (mostly less than sufficient) government option that they pay little for, hoping that they don't get sick. Then comes the mandatory insurances of "ownerships". Mortgage insurance to cover loan default, required property insurance for that home, auto insurance (full coverage also required by your lender on a new car) etc. Fearful insurances like disability insurance to cover the bills if they should become unable to work (wouldn't want to lose all my stuff). Life insurance so the kids have a comfortable life at the level they've become accustom to in the even of death etc. There may also be liability insurances connected with their line of work. Middle class people have a lot of insurances that often take a significant portion of their monthly budget.

chrisBob 12y ago
I agree except for life insurance. Most life insurance (at least a whole life policy) is a way to pass on wealth tax free, rather than a real insurance policy.
- grecy 12y ago
  And why would you want to do that? You're assuming that passing on wealth is a good thing, implying that it will make your kids happier. In all honestly, when my parents pass, I genuinely hope they've spent every cent of what they earned in their lives and my brother, sister and I wind up with nothing more than photo albums. They worked their entire lives for that money and I want them to spend and enjoy that money. I can earn my own.
  - Jtsummers 12y ago
    I would like the same for my parents. But I choose to keep my employers life insurance because it's cheap (about $100/year) and between it and my savings will more than cover both my sister's and my parents' current debt (mortgages). Should I die suddenly, they won't be happy but the cost to me is negligible and the benefit to them is great. Once alleviated of the debt and annual expense they'll all be able to retire a little bit earlier or a little more comfortably. Sure I don't get anything out of it, I'm dead, and the money won't bring me back. But it will bring them some financial peace. Now, if it were more expensive I might have a different view on it. I certainly have no intention of buying more life insurance until I end up with actual financial responsibilities (spouse, kids) that would more obviously need the money in my absence. EDIT: Word choice, I slept better last night than I have in months, but it's still not enough. Sleep deprivation wrecks my ability to write.
grecy 12y ago
To give a concrete example to artmageddon - I drive a $450 car so I have the absolute minimum insurance on it required by law. Even after only one year of not paying for full comprehensive, I will save money if it gets stolen or burns to the ground and I walk away. (I do have high third party - so if I hit a Porsche, damage to it and people is covered). I pay $300/year for the car insurance I have. I currently don't have any kids, so I've opted out of Life Insurance at work, instead getting more money into my bank account. In all honestly my savings account would cover my funeral expenses, so why would I want my family to get $250k in the event of my death? It's not going to make them happier. I also opted out of the health insurance at work, so I get a bigger paycheck. I'm 32, fit and strong, and I can count on one hand the number of times I've been to a doctor in my life. Obviously this circumstance will change as I get older and have kids, and I'll re-work my approach. EDIT: I live in Canada - basic health care is more than good enough.
- ryandrake 12y ago
  You opted out of health insurance??? Obviously I would never wish a freak traumatic accident or sudden debilitating illness on anyone, but should one happen to you, please post back here about how those slightly bigger monthly paychecks worked out for you.
  - brightsize 12y ago
    Anecdote: my brother, who IIRC was unemployed at the time, chose not to purchase even a catastrophic plan, under the theory that he was perfectly healthy so why should he? Then one day, out of the blue, horribly sick, with intense abdominal pain, almost unable to walk, he had to be taken to the emergency room to have his appendix removed. The bill was something like $17K and he paid all of it out of pocket. He was in his 30s and I think a reasonable catastrophic policy would have cost a couple hundred $ a month and would have, in this case, saved him $12K or thereabouts in hospital bills. This was just for an appendix, something more serious could have wiped him out financially. It's crazy not to have at least a catastrophic health insurance policy at any age.
    - 12y ago