Save on Insurance by Paying in Full

This is a guest post by Kacie from Sensetosave. Kacie is a soon to be first mom who blogs about her frugal lifestyle. Read this fun post she wrote about the Fuglier and Fugliest ways to save money. If you enjoyed her post consider subscribing to her blog.

If you’ve shopped around for better insurance rates and have combined insurance policies for additional savings, take your savings a step further:

Pay your premiums in full and make monthly payments to yourself.

Depending on your insurance premium, this could be daunting at first. However, once you get to the point where you are paying in full, each month you can deposit 1/6 or 1/12 of your premium into a high-interest savings account. You’ll avoid installment fees and you’ll earn interest on your savings.

For example, my car insurance is $366 for six months.

Each month, I send $61 ($366 divided by six months) into a savings account within ING Direct where it earns 2.75 % APY.

At the end of six months, I’ll have an extra few dollars in my car insurance savings account thanks to interest.

My car insurance company charges $4 per month if I pay in monthly installments. Over the course of six months, that’s an extra $24.

In all, paying my car insurance in full saves me at least $27 per six months.

I take this approach with our renters and life insurance policies as well.

You’ll save even more money if you have higher premiums and/or higher installment fees. If your six-month premium is $1,000 and you bank $166.66 each month at 3 percent interest, you’ll earn $8.73 in interest over that span. While that’s not a huge sum, it’s still your money.

Why let your insurance company make even more money? Pay yourself and pocket the savings instead.

– Kacie at www.sensetosave.com

Share This Post



Comments

3 Responses

  1. Michelle H. 9 years ago
  2. UmZain 9 years ago
  3. Mercedes 9 years ago

Add Comment