These days, there is an insurance policy available for just about everything. However, just because a policy is available does not mean that you should buy it. In fact, there are many types of insurance that you should not waste your time and money on. Here is a list of several types of insurance that you should avoid.

Accidental Death Insurance

This type of insurance provides coverage if you die by accident. However, accidental death is often already covered by other types of insurance that you probably already have such as life insurance, homeowner’s insurance and car insurance. Additionally, many accidental death policies are often more difficult to collect on that other more standard policies.

Flood Insurance

If you are not required to buy flood insurance by your mortgage lender or landlord, you most likely do not need to buy it. Only those living in high risk flood zones need to worry about flood insurance. How do you know if you live in a high risk flood zone? Your lender or landlord will inform you.

Life Insurance For Your Children

The purpose of life insurance is to leave money for the people that depend on you in the event of your death. However, your children do not have dependents that need to be taken care of in the event of their death. Therefore, the money that you would spend on a life insurance policy for them could be better spent on a college fund.

Flight Insurance

This type of insurance functions just like life insurance. If you die in a plane crash, then this policy will pay out to your family. However, a good life insurance policy makes flight insurance unnecessary because it will provide coverage in the event of a plane crash. Make sure that your life insurance policy covers plane crashes and skip the flight insurance.

Car Rental Insurance

This type of insurance provides insurance coverage if you get into an accident while driving a rental car. If you own a car and have a decent car insurance policy, it should provide you with coverage for rental cars. Check your car insurance policy to see if you are covered. Keep in mind that some credit cards provide rental insurance coverage so you might want to call to find out if your card comes with rental coverage. Do not purchase rental insurance if you already are covered.

Extended Warranty

Extended warranties are offered for many different types of products. Their purpose is to extend the length of a product’s original warranty. If you have an issue with the product, an extended warranty can help you to fix or replace it. However, the fact of the matter is that extended warranties are rarely used. In fact, most manufacturers that offer them do so because they are profitable. Unless you really want the peace of mind, you are probably better off skipping the extended warranty.

Private Mortgage Insurance

This is generally required by mortgage lenders if the borrower does make a down payment of at least 20 percent of the home’s total value. The purpose of this insurance is to protect the lender in the event that the borrower misses a mortgage payment. Since there is no benefit to the borrower for this type of insurance coverage, it is recommended that you make the required down payment to avoid it. Keep in mind that certain government mortgage programs run by the Federal Housing Administration and the Department Of Veterans Affairs will allow you to make a smaller down payment and avoid private mortgage insurance.

Cancer Insurance

This type of insurance provides coverage to help you pay the costs of cancer treatment. It is usually used as a supplement to your standard health insurance policy. However, it is unnecessary if you have good health insurance. Even if your medical insurance isn’t top notch, it is still probably cheaper and wiser to purchase additional health insurance coverage instead of limiting yourself to cancer coverage.

Mortgage Life Insurance

This type of insurance will pay off your mortgage in the event that you die. However, it is much more expensive than a life insurance policy. Get a good life insurance policy and your family will be able to pay off your mortgage and your other debts with the life insurance funds.

There are many different types of insurance available to consumers. The bottom line is that you should only buy insurance coverage that you absolutely need or are required to get. Don’t get suckered into buying a policy that you’ll never take advantage of. If you are unsure about whether you should buy a particular type of policy, consider consulting a financial adviser for helpful advice.




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