10 Insurance
Policies to Avoid
Previous-
You Probably Don't Need This
When it comes to insurance, people often think that it's better to be safe than sorry, but often wind up spending more money than they should on coverage they don't need.
Click through our gallery to see 10 of the more common types of insurance that experts believe are a waste of money for most people.
Do you own one of these policies?
· Read Full Article by Jonathan Berr
Next: Children's Life Insurance -
Life Insurance for Children
Why You Don't Need It:
While losing a child is about the toughest thing that a parent can experience from an emotional standpoint, by in large it does not lead to economic hardship. "No one is depending on the baby's income or the child's income for continued survival," Robert Hunter, director of insurance for the Consumer Federation of America, says. "Economically, it's not an appropriate thing to do."
Next: Cancer Insurance -
Cancer Insurance
Why You Don't Need It:
One company selling these types of policies advertises that it provides "essential coverage against enormous risk." Both Hunter and Greg Daugherty, executive editor of 'Consumer Reports,' don't agree with that sentiment, arguing that it's wasteful for consumers to protect themselves against dying in a particular way. "If you are killed, to your family it's a big loss however you are killed," Daugherty said. "You don't need to protect against any particular way of getting killed. You are much better off having a good insurance."
Next: Accidental Death -
Accidental Death
Why You Don't Need It:
Unless someone is in a particularly dangerous profession such as a stunt man, this type of insurance isn't needed. Moreover, most people don't die from accidents, making it unlikely that a person's heirs will ever see the money. Experts recommend having a comprehensive life insurance policy instead. "You wouldn't buy toothpaste a squeeze out of the tube at a time," Hunter said.
Next: Travel Insurance -
Travel Insurance
Why You Don't Need It:
Most people don't need coverage to protect against a trip cancellation unless they are seriously ill and are worried that a reoccurrence of their disease may hamper their trip plans, Hunter said. This coverage might be worth it for people who are planning a particularly expensive trip that would be difficult to reschedule otherwise.
Next: Whole Life Insurance -
Whole Life Insurance
Why You Don't Need It:
Most people are better off buying term insurance rather than whole life, which includes an investment component that people can borrow against. "We're solidly on the side of term insurance for most people," said Daugherty, adding that people need to make sure that a spouse who doesn't work outside the home also is covered because their death would "create a financial need on the part of the family."
Next: Inconvenience Policies -
Insurance Against Inconveniences
Why You Don't Need It:
Insurance against inconveniences -- having rain on your vacation and losing a pair of contact lenses -- may be annoying but they are hardly the end of the world. Nonetheless, there are policies available for these situations, Hunter said. On a related note, consumers should avoid buying extended warranties on consumer electronics, according to Daugherty.
Next: Identity Theft -
Identity Theft
Why You Don't Need It:
Consumers are increasingly worried that someone will steal their confidential information online. Consumer Reports, though, recommends that people regularly check their credit reports, which are available for free, instead. "We haven't been impressed with what we have seen so far," Daugherty said.
Next: Insuring Your Clunker -
Insuring Your Clunker
Why You Don't Need It:
It makes no sense to have comprehensive and collision insurance on an old car that's not a classic. The insurance company will only give you the official Blue Book value of the vehicle if it's totaled in an accident, said Carolyn Gorman of the Insurance Institute of America.
Next: Extended Warranties -
Extended Warranties
Why You Don't Need It:
These are often a waste of money. Most electronics goods of decent quality will not fail while they are under warranty. "We think they are generally not worth the money," said Daugherty of Consumer Reports.
Next: Payment Protection -
Payment Protection Insurance
Why You Don't Need It:
These policies will pay your credit cards or mortgage payments in the event someone becomes will or loses their job. Instead, people should make sure that they have enough money saved for a rainy day.
More on AOL: Cut Health Care Costs -
More on AOL:
Cut Health Care CostsFinding affordable health care is no easy feat -- and it's not getting easier. Seeking out a less expensive plan is obviously the fastest way to cut your insurance costs, but you may end up sacrificing key benefits.
Instead, here are five ways to help lower your health insurance bill without lowering your standard of care.
· 5 Ways to Save on Health Insurance
More on AOL: Cut Car InsuranceMore in Money & Finance:
-
More on AOL:
Pay Less for Car Insurance
Have you gone shopping for the best car insurance coverage lately? If not, you may be throwing money away. Experts recommend that consumers review car insurance policies every year. Yet, only 20 to 35 percent of people actually do so.
Click through our gallery to see how to make sure you are getting the best deal.
Start Gallery: Step No. 1More in Money & Finance:
Recent Comments
tryintomu 06:31:27 PM Jun 21 2008
Melissa is right on in her analysis. When done correctly, whole life insurance is a far superior product to the term insurance offered by your dime-a-dozen carrier. When someone takes out a whole life policy with a QUALITY CARRIER (NW mutual, mass mutual, ny life are among the few) at a young age or for their child, they not only lock in lower premiums and better health ratings, they can build up substantial cash value that grows at the company's dividend rate. This cash value can be used for a variety of reasons down the road, including college funding, retirement income, and emergency cash.
On the other hand, term insurance, while intially cheap, tends to contain increasing premiums as well as age limits on the renewability of coverage. I've heard many stories of people with only term insurance who lose their coverage at 65, only to leave their spouse/children at risk with nothing to show for the years of premium payments. Additionally, the "buy term and invest the difference"
Threesniders 07:29:28 PM Jun 20 2008
i think people should have as much insurance they can afford! we live in a world were people sue for anything!
JBHASCASH 10:43:32 AM May 31 2008
to say cancer insurance is a ripoff is rediculous. when my aunt had cancer the 50,000 lump sum when to pay her future bills. this allowed her just to get well. not having to worry about losing her house and car. The number one cause of bankruptcy is hospital bills. before you make a blanket statement maybe it would be better to do research. cancer insurance isn't for a death benefit. it's a life benefit.
HJSBach 04:53:52 PM May 08 2008
AOL is doing a major disservice to all of us with this blanket advisory article. In most cases there are excellent reasons for some or all of us to have insurance of various types. You should be recommending researching multiple companies before buying; mutuals, for example, are usually a better deal.
My girls can increase their coverage to fit their needs at a far, far lower cost because I bought whole life for them when they were babies. One would not be able to buy life insurance now due to health problems, but her husband and 2 children would have something to help out should she die. And she can increase her coverage at specific ages because that is part of the agreement, regardless of health.
HJSBach 04:52:36 PM May 08 2008
AOL is doing a major disservice to all of us with this blanket advisory article. In most cases there are excellent reasons for some or all of us to have insurance of various types. You should be recommending researching multiple companies before buying; mutuals, for example, are usually a better deal.
My girls can increase their coverage to fit their needs at a far, far lower cost because I bought whole life for them when they were babies. One would not be able to buy life insurance now due to health problems, but her husband and 2 children would have something to help out should she die. And she can increase her coverage at specific ages because that is part of the agreement, regardless of health.
Jvadella73 01:36:37 PM May 08 2008
PAYMENT PROTECTION FOR AN UNEXPECTED INJURY, JOB LOSS OR IDENTITY THEFT IS BOGUS. THESE COMPANYS MANY WHICH ARE FAKE MAKE IT TOO DIFFICULT TO PURSUE FOR COMPENSATION. IN FACT MANY PATRONS EVENTUALLY GIVE UP TRYING AND JUST END UP PAYING THE BILLS ANYWAY. DONT BE FOOLED, SAVE YOUR MONEY AND ASK QUESTIONS TO FIND OUT HOW TO PROTECT YOURSELF FROM THE REAL THIEVES.... BANKS, CREDITORS, AND COLLECTORS.
TriniLibby 12:05:35 PM May 08 2008
Did the writer of this article meant to write ILL instead of Will?
These policies will pay your credit cards or mortgage payments in the event someone becomes will or loses their job. Instead, people should make sure that they have enough money saved for a rainy day.
Ramzilla4u2 09:02:39 AM May 07 2008
ROFLOL, im not sure who wrote these articles but they must have been on drugs. no need for child life ins. Alrighty considering a funeral is a cool 6-7 thousand dollars. Who has that sitting around to spend on a funeral. Term, noway thats like renting a house ur throwing away ur money. Least with whole life you have something to barrow against, or cash out. I sell accidental death on all teenage drivers you know how many times in 5 years it was used? 3 times all 3 times were to parents who couldnt afford life ins on their teenager.
MelissaL1021 08:26:09 PM May 06 2008
If you buy a whole life policy on your child asap, the premium will stay level/never increase for the rest of your childs life. Why is this important? Well if you are like most parents, lif ehappens and sometimes your child develops something that will make it so that your kid won't even qualify, DECLINED!!! If I knew about Life Insurance when my son was 2 or 3 I would have bought some for him. But, he has been diagnosed with autism. So he is uninsurable. Before you even think about Life Insurance, you want to find a good company. As you know in the market today, you need to make sure the Insurance company will still be around to pay the claim!!! Mutual VS Stock. The difference is Mutual the policy holders own the company, I have Life Insurance and I am a policy holder so I own a piece of the company, thats important because if the company does well with the surplus and dividends will be paid to me a policy holder. In a Stock company, the board of directors get the dividends