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:
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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
RDCMADMAX 10:04:47 AM Sep 04 2008
I buy travel health insurance EVERY time I leave the U.S. Does the idiot who wrote the article know that Medicare won't pay any medical bills incurred outside the U.S. Also check out the cost of being med-evacted home. It's a fortune. I am 66 and pay about $60 for 10 days of coverage. You can buy it online from a reputable company, Old Republic.
CRAIGSP51 09:26:12 AM Sep 04 2008
I am a retired multi line agent. Have had cancer twice. My cancer policy paid promptly both times. Don't tell me the money didn't help during trying times. By the way, you have a one in four chance of getting cancer in your life time. With regards to buying life insurance for children. Cost is based on your age at time of purchase. Check out the cost of $150,000 on a three year old then price it at say age 35. With permanent insurance, the cost is locked at the purchase age. Do the math. The people that wrote this didn't do their home work!!
jlf021601 06:57:12 PM Jul 22 2008
Over the years I have found that any insurance companys first reaction is to delay payment untill their legal dept can find a reason not to pay a claim. The one true saying about insurance is that "everything is covered except what happens"
CandiceUSRRR 01:25:35 PM Jul 22 2008
I am an insurance agent and I found your comments downright appalling and misleading about the true value you get from having a cancer insurance policy. You donât buy a cancer policy because you think you will die from it you buy one to help live with cancer. Most cancer plans out there today have a cancer screening benefit, that pay you to have screening test because the best way to BEAT cancer is with early detection. The survival rate of cancer is going up with the cost of a lot of drugs for treatment is not. Did you do any research and how or what a cancer plan pays for. If you have had anyone in your family with cancer you would know what a financial strain it can put on you on top of going through cancer treatment!
Jddelash 12:20:33 PM Jul 22 2008
What about a guaranteed purchase option on a youthful policy? You can guarantee the insured can buy future amounts of coverage at standard rates even if they have health history that would either not allow them to buy coverage or pay higher rates if they were able to still qualify. Diabetes, cancers, Lupus, etc. That would make the policy purchased as a child invaluable to the insured as an adult with a possible family or responsibilites to provide for.
OLD GOB 12:01:36 PM Jul 22 2008
I agree with those who say PERMANENT insurance is a good thing, not bad...balance the amount you need as some whole life and some term... When the term expires the whole life is still there till you die or decide to cash it in... I am 64 and have become uninsurable through some health issues..but I already have a permanent policy so it is moot! I will always have a certain amount which grows and also allows me a fall back if I need some money quickly... I sold insurance for 5 years and always felt good selling people permanent insurance becasue it just made sense...and I do not or never sold variable or universal insurance... If an agent doesn't explain whole life as better than term, excuse him from the home...YOU CAN BUY WHAT YOU WANT BUT HE/SHE IS IRRESONSIBLE IF THEY DON'T COVER ALL TYPES... Term is just that, term for a period of time...but after it expires, do yu want to start paying up to 4 or 5 times the monthly premium becasue now you are older? Whole life should never
namsluvrae1 11:42:36 AM Jul 22 2008
can anybody tell me a little about esurnace>??namsuvrae1@aol.com
RonJerro 11:30:09 AM Jul 22 2008
It appears that not all of my comments went through. Cancer insurance covers things that are not normally coverd under ones maedical insurance like transportaion and lodging costs and income while off from work; so, it might make sense for some to buy. If you want good advise when buying insurance seek out an agent that belongs to NAIFA (Natonal Association of Insurance and Financial Advisors (NAIFA.org). Members are usually well informed on the latest developments in their profession.
RonJerro 11:22:37 AM Jul 22 2008
Mr. Berr is way off on his commentary when it comes to life insurance. First of all Whole Life is one form of PERMANENT life insurance. To make a statement that you should not buy it or any other type of PERMANENT insurance (universal life, Variable life etc.) is misleading and irresponsible. The question one has to ask when buying life insurance is do I want it for the rest of my life. If the answer is yes then permanent insurance is what you need to buy. Many Permanent plans, like Universal life, give the inured the choice of building a lot of cash in the policy or have it perform like term insurance (very little cash value if any) for the rest of their lives. Many permanent plans that are funded properly have a 5-6% gain in cash value (in addition to their annual premium) after it has been in force over ten years and that gain accunmulates tax deferred. Children's insurance has already been addresed so I agree that it is a good thing to have. I was completely against Cance
