Tuesday, 26 May 2015 11:08

Cheapest is Best?

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Do people really believe this statement to be true?

In general a consumer understands that a difference in quality of product is reflected in the purchase price. Simple examples would be clothing, electrical goods or even a meal in a restaurant. You can probably expand this list to every single purchase you make.

However, why is this logic totally dismissed when it comes to purchasing an insurance policy? Do people believe they receive the best value from the cheapest insurance product?

The answer is that insurance is a reluctant purchase. Therefore people just want to pay as little as possible and generally file it away for another year. 

It is a fact that insurance companies have become more difficult to deal with. All of them face constant pressure from their Global Head Office / Shareholders to generate maximum profit. In order to get business onto their books, an insurance company product has to be competitively priced. Therefore, they must take actions to control their overheads. Such actions include:

  • The reduction in the administration costs. The biggest such cost is staff salaries.
    • Therefore, do not be surprised if you end up dealing with a call centre, possibly not even operating in Ireland.
  • The reduction in claim costs. Insurance companies forget that their claims settlements are in fact their real shop front.

Therefore, be aware of what you are really getting for your purchase. All products and insurance companies are not the same. With any purchase you make you should establish if the person who sells you the goods is the same person you deal with if you want to gain the benefit of your purchase.

One simple action can be taken by you when it comes to your decision to purchase insurance. This will ensure that you improve the quality of your purchase. Take independent and professional advice. Speak to an insurance broker before you commit to a purchase. This can be free or maybe provided at a small charge. It may ultimately save you a lot more than the price of a policy.

Last modified on Tuesday, 26 May 2015 11:33
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About Cregan Kelly O'Brien


In 2007 Maurice Cregan and Colm Kelly established CK Financial Services to provide financial planning and advice to business owners and individuals. Tommy O'Brien, a General Insurance expert, then joined them in 2010, enabling them to meet the full financial needs of their clients. Financial Life & Planning Limited would deliver Financial Services, and O'Brien Cregan Kelly Insurances would deliver Insurance Broking services. Two Business Names were registered Cregan Kelly O'Brien Financial Planning and Cregan Kelly O'Brien Insurances

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