What are Some Unnecessary Types of Insurance Policies?
We spend money for food, gas, groceries, electricity and study. These expenses are necessary for our good life. But it feels ashamed when someone spends money unnecessarily. For example, useless insurance plans. It doesn’t mean that all policies are unnecessary but undoubtedly some are also there. Let’s see some of them.
This insurance is to give protection to family and children after the death of the policyholder. It is smart to purchase if a person have children and they depend on his income. Term life is better than whole life insurance because it is less costly.
Accidental Death Insurance
This insurance policy is so costly because it gives protection against premature dying by accident or disease. And deaths by accidents are very unlikely so that do not invest money in this policy.
Mortgage Life Insurance
This policy gives surety about payment of mortgage money if a person dies before paid off. Though the plan costs less, normally this type of incidence occurred rarely.
Private Mortgage Insurance
This is required when a person buy a home with a down payment less than 20% of the value of a home. Look for alternative plan instead of private mortgage insurance. A person can opt for 80-10-10 strategy. Here, the mortgagee can take a regular mortgage for 80% of value, down pay for 10% and also take a loan for remaining 10%.
If you are living where flood may get in your area, then simply take this policy but if a possibility of a flood is in vein, do not go for this.
Credit Card Loss-Prevention Insurance
Instead of paying $180 per year for this insurance, just pay $50 per credit card by law.
Credit Card Insurance
This policy is special for those who can’t pay credit card bills in time. This insurance gives protection against minimum required payment. Avoid this premium and pay debts in time.
This policy works when any policyholder lost his job. Instead of paying a premium for this, it is advisable to invest money in another way.
Regular health care coverage might not include diseases like cancer and tuberculose. It offers to cover expenses of cancer and other diseases with a high premium, so buy it only if you can afford it.
This policy covers repairing expenses of a car in an accident. If you are thinking to buy a new car instead of second hand, do not waste money in this.
Rental- Car Insurance
A person can take a car on rent instead of being purchasing a new car. It is totally out of mind to invest in this insurance.
Rental-Car Damage Insurance
If you already have car insurance, then do not pay for this.
Many people consider taking insurance for a flight so that if a plane crashes, they get paid money. But it is very unlikely that every plane crashes.
Generally, salesmen recommend buying extended warranties for electronic appliances. It is worth to buy only when repairing expense is heavy over the years.
The most common cause now a day is identity theft. But there is no need to buy insurance for it because you can also call customer care number and lock your card.
So, never buy insurance policies without finding alternatives.
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