How to tell if you are being ripped off
I recently met with a client who had been ripped off without even knowing it.
He had taken out a funeral plan policy for both him and his wife that would pay out $15,000 towards the cost of a funeral. The cost for their combined policy was $60 per month. Little did they know that a good insurance policy includes the equivalent of funeral cover – plus more.
For only $5 more per month, I found them a basic life insurance policy that gave them both $500,000 of cover. On top of that, they were delighted to discover that the life insurance policy will advance $20,000 for funeral expenses once a death certificate has been produced – more than their funeral plan could give them.
So how was my client to know that they were could have been getting more for their money?
Let’s go through the usual checklist that you would go through:
- Sounds too good to be true.
Verdict: My client had asked lots of questions and this seemed like quite a reasonable plan with no wild claims. No alarm bells yet.
- It looks and smells of a gimmick, it probably is one.
Verdict: The company that sold them the funeral plan had a professional website, customer service centre with a few real-life sob stories that talked about the benefits of a funeral plan. Still no alarm bells.
- Check competitors.
Verdict: My client’s research showed that this wasn’t the cheapest offer (as you know, cheaper is not always better in the end) but was priced fairly against other funeral plans. No alarm bells here either.
- Read forums and other reviews.
Verdict: My client did not do this, but if they had they would have seen comments about the different funeral plans available and maybe even some customer service complaints, but this would not give any indication of value for money. No cause for alarm there.
- Talk to an expert who does not have a personal agenda behind their recommendations.
Verdict: This is ultimately where my client was able to find out that they had been ripped off. I have the benefit of having 20 years experience in shopping around for the best solutions for my clients and could offer them a non-biased solution that saved them a lot of money.
In all of your business activity, there are huge benefits in speaking to experts who are not tied to one particular product or supplier. What many people don’t understand is that it isn’t necessarily cheaper to “go directly to the source”.
For example, by going to a mortgage broker you will save a lot more money and time than if you were to try going directly to a mortgage provider.
Here’s some other areas where you save yourself money and heartache by going to an expert:
- Printing. While they can be harder to find, printing brokers are highly recommended. They hire the best printing product for each client so that they are not limited by their own technology. You save a lot of money and get better results.
- Marketing. A marketing consultant will know the difference between suppliers and can also advise what is a waste of money for your particular business.
- Accountant. If you are serious about being in business then you will use the services of a good professional accountant rather than DIY taxation. Remember though, not all accountants are created equal. Are they up to date? Are they pro-active? The ATO can be difficult if you get it wrong and a good accountant will save you money.