When it comes to insurance policies, it is becoming ridiculous. Everyone gives you the “better safe than sorry” line and tries to convince you that you need something. However, there is some insurance coverage that you just don’t need. Here are 7 insurance policies that are becoming more popular–but that are probably superfluous:
- Mortgage life insurance. This is different from just plain mortgage insurance. Mortgage insurance covers the mortgage (something the lender requires you to have if you do not put 20% down) if you default on your payments. Mortgage life insurance continues to pay the mortgage if you die. To tell the truth, a good term life policy that covers the cost of your home is a better idea. And much, much cheaper.
- Car rental insurance. When you rent a car, you might be asked to pay insurance. It is optional, but visions of having to pay for a car you ruined obviously arise. Before renting a car, check with your auto policy and with your credit card. Often, these things come with car rental insurance. If you already have coverage, decline.
- Cancer insurance. Cancer insurance is becoming a popular push. Before you get scared by the costs of cancer into buying such a policy, check with your health insurance policy. Chances are that you already have coverage.
- Flight insurance. Yet another completely extra insurance policy. Flight insurance is supposed to cover you during airline crashes. However, your health insurance should cover you and if you die, your term life policy should be more than sufficient. This is different from traveler’s insurance, however, which helps you protect yourself against loss because nature or some other uncontrollable circumstance cancels your trip.
- Credit card insurance policies. There are a variety of credit card insurance policies that are supposed to help you make your monthly payments in different situations. However, the law limits losses to $50 on credit cards (nix credit card loss protection), you should have sufficient life insurance to cover if you die (goodbye to credit-life), you can purchase less expensive disability coverage, and you should have an emergency fund to make credit-card balance insurance unnecessary.
- Accidental death insurance. Term life should cover any cause of death (except suicide in some cases), so this insurance is totally unnecessary.
- Identity theft insurance. The latest vogue in superfluous insurance coverage preys upon your fear of having your identity stolen. However, if you regularly check your financial statements and credit report, and report problems in a timely manner, you don’t need this coverage. Besides, it doesn’t cost anything to fix errors on your credit report.