Whats the difference between having a safe with 5,000 dollers in your trunk,and having insurance?

Question

Whats the difference between having a safe with 5,000 dollers in your trunk,and having insurance?

Answer 1

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Answer 2

You mean, I assume, that you want to use the $5,000 to pay a potential claim.

Well, the main thing is, when you use that $5,000, it's GONE.  And $5,000 doesn't go very far when it comes to buying heart bypass surgery or fixing that car you rearended.

When you have an insurance policy, except for life insurance, you can make MULTIPLE CLAIMS.  So you're not looking at potentially the policy paying out limits only once during the year, but several times.

Answer 3

$5,000 in insurance costs significantly less than $5,000.

Answer 4

Well if your car is stolen with $5000 in the trunk you've got nothing,if your car is stolen and you have insurance you can get another car.

Answer 5

Depending on your age and health, you could take that $5000 and purchase a single premium life insurance policy worth five times that amount, and the cash value would build to more than that over time. If that policy accumulated didvidends, you could have them purchase paid-up additions, and your death benefit would grow, along with your cash value.

Depending on your age and health, you could also take that $5000 and purchase a 20-year term life policy of maybe $250,000 and pay it in advance for 20 years. Or just make small monthy or annual premium payments. If you die, your beneficiary would receive the $250K, plus the balance of the funds that are left would go into your estate. If you put the 5K in an interest-bearing account, that would even make the cost of the term policy less, by using the interest toward the premium payment.

The money in the trunk would not accumulate anything, and over time it would be worth less than it is now. It would not have the same purchasing power that it has today.

Why would you be hauling around a safe with money in it anyway? The car could get stolen, and the safe and money goes with it. The car insurance will not cover loss of cash.

Not smart!

You should see an insurance agent.