When avocados get expensive you almost don’t notice for the first couple of weeks and then suddenly you do notice and you think ‘holy heck that’s ridiculous.’
Insurance premiums can go the same way… over time we forget the reason we took out the insurance in the first place, we forget we knew that premiums would rise or maybe we just never realised how much they might go up by. When we do notice we feel a bit ripped off.
When there’s a sudden jump we pay more attention. The price of home and contents insurance made headlines earlier this year when Tower and IAG announced customers who live in areas prone to natural disasters and severe weather (specifically Wellington and Christchurch) may have to pay more for insurance. This led many people to look for alternative providers or reassess their need for insurance at all.
When prices go up for commodity products we either absorb the cost or ditch the product. Some products are easier to ditch than others. Most people are probably happy to go without avocados for a couple of months but it’s much harder to do the same for your phone, electricity or your insurance.
On the other hand when prices go down we simply enjoy having the extra cash in our wallet. Over winter when we’re paying more for heating and our electricity goes up we tend to start managing our power use more efficiently to try and bring down our power bill. In summer when we have lower bills most of us probably barely think about it.
$500,000 of Life Insurance costs a non-smoking 40 year old women $24.50 a month. That’s nearly 5 avocados (as at 28 May 2019 from Countdown Online). At Dominoes you can currently get 2 pizzas and 2 sides for $24.
Every week we make decisions about how to spend to spend our money. Some decisions are conscious choices and some aren’t. Some costs we have more control over and others less. Some have an immediate benefit, like not being hungry, and others are harder to see.
Life Insurance can feel like a grudge purchase. Premiums go up every year as you get older with no additional benefits. Even when you first takeout a policy you don’t get anything physical for it, other than a policy document. But, what you do get is comfort and reassurance knowing that your family will be okay financially if the worst should happen.
What’s more important to you? Avocados, pizza or your family?