Insurance Policies That You Don’t Need To Pay For
6 dumb insurance policies you really don’t need in your life.
Nowadays you are offered insurance policies on almost everything that you purchase. And of course every insurance policy offered to you is not needed. According to Robert Hunter, the Director of Insurance for the Consumer Federation of America, you should only buy insurance if it covers catastrophic loss and comprehensive coverage.
Mortgage life insurance
If you die with an outstanding mortgage, the policy pays off your loan. Mortgage life policies can be expensive for the type of coverage that you are receiving. And one thing to note is the value goes down every year as your mortgage balance decreases. Another thing to remember is that this insurance can only be used towards your mortgage and doesn’t allow your heirs to use to money from the policy on anything else. Keep in mind that when you die, your family may have more pressing needs rather than paying off your current home loan.
Wedding insurance policies pay for non-refundable deposits if the wedding is ever cancelled. These types of policies normally cost anywhere between $150 and $550, plus around $185 to $1 million in liability insurance. Read the fine print as you may already have liability protection through your contract with your vendors, and these risks may already be covered through your homeowner’s insurance. Make sure that you have a full understanding on what exactly you are buying. Also be aware that most wedding policies do not cover “cold feet.”
Most dental insurance policies pay for cleanings and checkups every six months and annual x-rays. Also many policies make you wait six months before covering fillings and up to 18 months before paying for a root canal. This insurance only makes sense if you have your entire family on your insurance policy or if you anticipate spending up to the maximum coverage on yourself. If this is the case, make sure that you compare the premiums with the maximum coverage.
Car rental damage insurance
Many car insurance policies cover rentals. When you are renting a car, make sure to check with your own auto insurance agency to see if you are already covered, because if so it makes no sense to pay for the same thing twice. Also depending on where you rent your vehicle from, you may be able to pay a small fee for insurance on your rental at the rental center.
Credit card loss insurance
When being offered credit card loss insurance by a credit card lender, keep in mind that they federal law limits your liability if your credit card is stolen. Your out-of-pocket expenses are limited to $50 per card. Most importantly if this does happen, most credit card companies don’t even try to collect the $50.
Disease insurance policies on cover cancer, heart disease, and other maladies. However it makes more sense just to purchase a medical coverage policy, instead of trying to identify every single type of disease that you may encounter over your lifespan. With a medical coverage policy, your medical bills will be covered regardless of the disease or medical problems you may have to face in the future.
April Lewis-Parks has more than 15 years of experience in the financial sector, she is a certified financial counselor, and a consumer affairs advocate. As the director of education and public relations for Consolidated Credit she is dedicated to generating awareness about personal finance issues and acts as their consumer affairs advocate. As host the of MissMoneyBee.com, she promotes financial education and offers timely and informative personal finance articles to educate the public. April’s promotional efforts can be seen in past issues of the New York Times, Washington Post, Newsday, Consumer Reports, the Business Journals, Money Magazine, Glamour, Cosmopolitan, Family Circle, among others. Connect with April on Google+.