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Destruction Derby insurance? Probably a good idea. If you're into that sort of thing, of course.

Destruction Derby insurance? Probably a good idea. If you’re into that sort of thing, of course.

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.

Disease-Specific Insurance

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.

Unemployment Insurance

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.

Flood Insurance

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.

Might of needed bad music insurance for this one.

Might of needed bad music insurance for this one.

Without the ability to see into the future, we often turn to insurance to protect ourselves from the unforeseen. Since we can’t predict our own mortality, we buy life insurance to protect our families’ financial wellbeing. We can never know if the person ahead of us on the road is going to slam on their breaks suddenly, so we purchase auto insurance to cover repairs, and own health insurance to help pay the costs of treating any injuries. Who knows why a burglar would break into your home and not the 24 others that look exactly like it along your street, but thank goodness you have homeowner’s insurance… you get the idea. There are certain kinds of insurance almost everyone should have, such as those listed above, while other types of policies tend to be specific to certain regions or circumstances, and still other kinds of insurance really aren’t worth it for anyone — period. Here’s a list of 10 insurance policies you can feel OK about not buying, as they’re just not worth the money for what these policies ostensibly cover.

Extended Warranties

It seems that whether you’re buying a dishwasher or a BluRay player, the salesperson pushes you to purchase an extended warranty. The fact is, most consumers never end up using these warranties. This is especially true if you make a big-ticket purchase from a reputable brand with a solid history of longevity. Don’t these people have any faith in what they’re selling?

Rental Car Insurance

Almost everyone pays a little more for an auto insurance policy that covers the cost of car rentals (usually limited by a certain dollar amount per day and a maximum amount of days they’ll cover). Many insurers promote this as a sound benefit, just in case your car requires some repair work after an accident. Granted, the price of  having rental care insurance on your auto policy is relatively low, but given how seldom you’re likely to rent a car, you’d save more money over the years to forego this policy and simply pay the low rental car rate yourself should you find yourself in need of a quick replacement.

Children’s Life Insurance 

You most likely own life insurance to provide for your children, heirs or other dependents in the event of your untimely death. Children, however, have no familes they must protect financially, so it makes little sense to purchase this coverage for your kids. Some insurers will argue that by starting a life policy for your children now, they can’t be denied coverage in the future if, for example, it was discovered they had a chronic illness. This is largely a waste of money, since statistically, most children will reach adulthood in good health. A more productive investment in your childrens’ future would be to use that money to fund an individual retirement account (IRA) or an education savings vehicles, such as a 529 college savings plan.

Flight Insurance

There is absolutely no need for you to purchase a flight insurance policy. No matter how much terrifying footage of airplane accidents you may have seen in your lifetime, your chances of being killed in a flight accident is statistically infamentesimal. Even beyond the rarity of these events, however, is that should the worst happen, your life insurance policy will cover this type of tragedy. Furthermore, it’s not uncommon for survivors of airline accidents to receive either settlement or court-ordered recompense through class-action litigation.

That concludes Part I of this article series on kinds of insurance you don’t need. Check back next week for the conclusion of the article, when we’ll look into the merit (or lack therof, as is the case) of six more insurance policies that aren’t worth your time or money.

bigstock-Cognac_and_Cigar_with_Smoke_on_black_background-34830566 (1)Quite simply…premium. Like, a lot of it.  Like the difference between, say, $70 a month and $240 a month. I know, painful right?

It’s a quick story, but one worth repeating.

Recently I was underwriting a guy who was an occasional cigar smoker. Only he answered no to the smoking questions when I asked them. You know, questions like “Do you smoke? Have you ever? Cigars? Anything else?”

It’s not that us insurance agents are out to learn every detail of your existence, but we need to have honest answers to these questions in order to get you the best underwriting results possible. Answers like, “I tried it in college” are appropriate to share (and not just for smoking!) because it allows us to determine what you’ll need to disclose.

It’ll also help us in coaching you for the exam. Because if you’re an occasional cigar smoker we can still get you non smoker rates. BUT, we need to know about it so we can say things like, “WHATEVER YOU DO DON’T SMOKE A CIGAR THE WEEKEND BEFORE YOUR MONDAY MORNING EXAM!!”

My guess is I don’t need to explain to most why that might be a bad idea, but in case you’re still wondering…YOU DON’T WANT TO HAVE NICOTINE SHOW UP IN YOUR LABS. It limits your options for carrier selection and may get you stuck with a smoker rating.

Plus, that result sticks with you for 12 months. Your results go to something called the Medical Information Bureau or MIB and anything that lands there is accessible to ALL of the insurance carriers. Which means that “I’ll just go to another carrier and say I don’t smoke” thought won’t really work. To get back to a non smoker rate you’ll have to be smoke free for 12 months (by most carriers standards) and go through underwriting again. So if we pretend that one cigar was indeed your first it’s going to be a) a very expensive cigar in terms of insurance premium and b) one that maybe should have been delayed another week.

All this said, we’ve got a few ideas on how to avoid this surprise nicotine in your blood because you smoked your very first cigar right before your life insurance exam problem. Nope, that wasn’t even close to a run on sentence…

1) Don’t ever smoke a cigar.

2) Definitely don’t attend any bachelor parties in the month before your life insurance exam.

3) Don’t hang out in cigar clubs.

4) By all means stay out of Vegas!!

5) Lock up any and all cigars within a 10 mile radius.

6) Just admit you smoke them from the start and find an insurance agent knowledgeable in underwriting cigar smokers (we’re one of them in case you were looking).

That last one is likely your best method. Message us for help. Before you smoke the cigar.

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