In Part I of this article, we covered flight insurance, rental care insurance, extended warranties and even life insurance for children, establishing that none of these insurance policies were typically worth your while. In this final portion of this article, we’ll look at six more types of insurance coverage you can feel confident about skipping.
Mortgage Life Insurance
As the name suggests, this type of policy pays off your mortgage in the event of your death, ostensibly so your loved ones needn’t be burdened by a looming mortgage. The reason not to buy mortgage life insurance is really quite simple: if you spent that money on term life insurance, your life policy, if an adequate amount, will cover much more than just the mortgage, taking care of other bills and expenses to ease your survivors’ financial strain.
Credit Card Insurance
Just about every credit card offer these days comes with a pitch for inexpensive credit card insurance, a policy that would pay off your bill should you be unable to do so. While it may seem like a good idea at first blush, if you have several credit cards, those policy payments can really add up. The better idea is simply to avoid running up credit cards entirely and to use them carefully and sparingly. Paying off your balance monthly will not only negate the need for credit card insurance, but you’ll also save a boatload on interest payments.
There are innumerable policies available to cover just about every major illness one could ever suffer, including everything from cancer insurance to diabetes coverage to heard disease insurance. Rather than assembling your health coverage piece mail, all you need to do is purchase one good medical coverage policy. Even a bare-bones major medical policy will cover everything an individual policy would—and having coverage for everything is always better than having coverage just for certain things.
Most experts agree that it’s far better to put aside regular savings for an emergency fund than it is to shell out premiums for unemployment insurance. While it’s easy to see why this might be an appealing option, relying on your own savings is a far better plan. After all, should you lose your job, odds are that in addition to your savings, you’ll be able to draw unemployment while looking for a new employer. Of course, a great deal of people never find themselves in this position, which means wasted money that could have been saved for something more productive.
Despite the terrifying commercials, if your home isn’t in a flood plain or located in an area that’s ever experienced excessive flooding, this is a policy you need not own. Do just a bit of research on your area’s history with water, and you’ll know whether you need to shell out the cash for this rarely necessary coverage.
Accidental Death Insurance
The odds of you dying in an accident are extraordinarily low, especially since most major tragedies that could befall you such as a fire or car accident are covered by other policies. Even if you work a hazardous job, you’re absolutely protected while on the job as well. The lack of real necessity coupled with exorbitant waiting periods and fine print make accidental death insurance a policy you can skip and still sleep well at night.
There are so many policies to chose from, and they all cost money. While a certain amount of insurance coverage is necessary and prudent, you need to choose carefully. In general, broad policies that offer coverage for a multitude of potential events are a better choice than limited-scope policies that focus on specific diseases or potential incidents. Before you buy any policy, read it carefully to make sure that you understand the terms, coverage and costs. Don’t sign on the dotted line until you are comfortable with the coverage and are sure that you need it.