10 Insurance Plans Not To Buy
Some insurance plans are necessary. You get plenty of benefit from good health, life, and car policies. However, there are other insurance plans that are simply not worth your money. Below are 10 you should definitely pass on buying.
1. Extended Warranties
A host of appliances and electronics offer extended warranties. It is often unnecessary though. Policies, especially for small items, are unlikely to pay off. Have your purchase tested before bringing it home, and chances are, if you bought from a reputable brand, it should work as advertised.
2. Flight Insurance
Airline accidents are relatively rare. Save your money and do not buy this extra plan. At worst, your life insurance should cover you if anything unfortunate happens.
3. Flood Insurance
Do you live in a flood prone area or anywhere with a history of water problems? If not, forget buying flood insurance. Your house is unlikely to be flooded from natural causes if your location is safe.
4. Credit Card Insurance
Simply put, why would you buy a policy to cover your credit card bill if you cannot pay it? It is far better to use that premium money to pay all your credit card bills on time.
5. Credit Card Loss Insurance
Federal law limits your liability to $50 per credit card if it is stolen.
6. Mortgage Life Insurance
In case you die unexpectedly, this policy will pay your mortgage. But instead of buying another plan, just invest in good life insurance. This money will be enough to pay off your mortgage and cover other expenses, too.
7. Unemployment Insurance
The premise is attractive but unnecessary. Just build an emergency fund for your security. The savings will always be there, plus you do not spend anything if you are always employed.
8. Accidental Death Insurance
Everything that this plan offers is covered by a good life insurance policy and more.
9. Private Mortgage Insurance
Essentially, you are paying to insure your lender. Don’t buy it! This is required if you purchase a home with a downpayment less than 20%. The better move is to pay the 20%, even if you need to get two loans for it. The PMI is just not worth it. You are paying for something that will never give you any benefit.
10. Rental Car Insurance
How many times do you rent a car in your lifetime? On the rare occassion that you do, the cost is relatively low and hardly worth insuring against. Save your money and do not waste it on buying this insurance plan.