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What Kinds of Insurance to Avoid

It is probably true when they said that you can get insurance [1] for everything. You can get insurance for your car, your house, your diamond necklace and diamond earrings, your pet Labrador, your home, and also you health.

We all know that getting insurance is a smart move, especially when we are preparing for the worst. Insurance should be there to help lessen the burden of having to find funds to pay for repairs, damages, medical bills, and others when an emergency or accident occurs.

Having mentioned the importance of insurance, do you really know what things you need to insure? Even if there are already various forms of insurance policies available, and an equally variable number of companies who are advertising and offering such services, don’t be too sure.

There are some types of insurance that although they sound sensible at first, you don’t really need them in the long run, and you might be disappointed because you have already spent a lot on them. So here are some of the kinds of insurance that you can avoid, and when you do, you will find that you are doing you and your family a big favor by saving more.

First up, you’ve got mortgage life insurance. So what is this kind of insurance? Simply put, when you are insured under this type of policy, your home mortgage will be paid off in the even that you die. CNN/Money explains that most of these offers are received by prospective clients by mail, and you need to sign the card and mail it back to avail of your mortgage life insurance.

Most experts will agree that you don’t need mortgage life insurance, because when you die, your family will need the proceeds to pay off more important things, not just the mortgage. Also, chances are, the people living in your home will still find ways to manage the mortgage payments at the time of your death. Don’t buy this insurance if you are living in your house alone, as it will be difficult to determine to whom the house will go to once the mortgage has been paid.

Flight insurance should also be avoided. This insurance covers you in the event of an airplane accident, for medical reasons and such. Also, you can be covered for additional expenses in case of flight cancellation of being bumped off your flight. Flight insurance can be unnecessary, especially if you already have accident insurance, and if you have traveler’s insurance.

Did you know that you can get insurance on outstanding credit card balances? The purpose of this kind of insurance is similar to mortgage life insurance. In the event of your death, the insurance company will pay off your credit card bills.

Insurance on outstanding credit card balances, does not seem to be practical because as said before, the family you will leave behind can use of those funds for other purposes, not only for credit cards. Both mortgage and credit life insurance policies tend to be ones you should avoid in most cases.

They are overpriced and often have limitations that make broader insurance products a better choice; if you need life or disability insurance, then get enough to cover all your expenses rather than buying policies for specific mortgage, credit card or other loan balances.

It pays to be smart about insuring your family and your properties, but it is even wiser to choose what insurance policies make sense, and which ones are redundant.