Back in 2006 Consumer Reports published an article that spoke about several types of commonly carried insurance that most of us do not need, but we pay for anyway.
We all have or have heard of the more commonly carried policies such as homeowner’s, life, health, car, flood insurance, and many others. These provide basic coverage, but there are many policies that we often take out based on fear! Fear that we might get our credit cards and identities stolen. Fear of being killed when flying. What we don’t realize is that many of these policies are already covered by own health, homeowners, car insurance and life insurance policies.
When a credit card company offers a policy that would protect you if you were to become disabled and unable to make monthly payments, they are not giving you any kind of a good deal on the cost of the insurance.
I have taken excerpts from the article published June 2006 10 insurance policies you don't need.
“June 2006
10 insurance policies you don't need
If you're like most people, you don't relish spending money on insurance. Sure, you need it, but it's not bright and shiny, you can't drive it, and no one is going to admire it. So it's all the more galling when you find out you've purchased insurance that you don't need. “Fear sells a lot of insurance,” says Robert Hunter, director of insurance for the Consumer Federation of America, a nonprofit consumer-advocacy group of which Consumers Union, publisher of Consumer Reports, is a founding member. “A good rule of thumb is to purchase insurance only from an insurance provider. And buy policies that are comprehensive.”
Insurance should cover catastrophic losses that you'd be hard-pressed to cover on your own. So what do you need? A term-life policy to cover your contribution to the family's expenses; a comprehensive health policy (or membership in a managed-care plan); disability coverage to provide income when you can't work; and homeowners and auto insurance to replace lost property. If you've got those, you don't need the following 10 policies.
1 Mortgage life insurance.
Instead: Rely on term life.2 Credit-card-loss protection.
Instead: Put credit-card numbers in a safe place, and report lost cards ASAP.3 Car-rental insurance.
Instead: If you're already fully covered, don't bother.4 Flight insurance.
Instead: Skip it. Term life will cover you if you die in a plane crash, and health insurance should cover medical expenses.5 Cancer insurance.
Instead: Chances are that your existing health insurance already covers cancer expenses, so forget about it.6 Credit-life insurance.
Instead: Make sure you have enough term life to cover loan payments.7 Credit disability insurance.
Instead: Make sure that your disability plan will cover your expenses, including any loan payments.8 Credit-card balance insurance.
Instead: Create an emergency fund that will cover 3 to 6 months of your expenses.9 Accidental-death insurance.
Instead: Stick with term-life insurance, which pays regardless of cause of death.10 Identity-theft insurance
Instead: Check your credit reports regularly. You can now get a free annual credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion). “
I am not advocating that you call up your insurance agent and start cancelling your policies. What I am saying is, you need to review the insurance you do have. IF you think there are overlapping policies, then by all means call up your agent, make an appointment and sit down to review all of your policies. If you have questions about what exactly your policies cover, by all means, call your agent, sit down and review this information.
It never hurts to go over your policies every few years anyway, to update deductibles, add or remove any riders you might have, and make any other adjustments as needed.
Copyright 2008 MsMarti. All rights reserved.
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