5 Types of Insurance Policies You Don’t Actually Need

Are you scared of the future? In the world of insurance, it’s the fear of the future that sells insurance. This is because we can’t predict the future, so we want to be prepared to cover our financial needs if, or when, something unexpected occurs. Insurance companies are completely aware of this and it’s the reason why they provide a variety of insurance policies intended to protect you from calamities that span from disability to disease to everything in between. 

Of course, everyone doesn’t want anything bad to happen. You may wish to insure your phone, your dog and your life. Ask yourself, do I really need to? In this article, we are going to discuss the kinds of insurance, and consider whether you really need it or not. 

1. Extended Warranty Insurance 

This type of insurance can be found on a host of appliances and electronics. Coming from the perspective of a consumer, they are hardly ever used, particularly on small items like DVD players and radios. If you bought your product from a reputable brand, you can be reasonably certain that it will work great as advertised and that the extended warranty is rationally likely to be unnecessary. 

However, let’s say you’ve purchased a $5,000 giant, flat-screen television, then the policy is unlikely to pay off, but it can make you feel better. But for everything else, just leave it. 

2. Automobile Collision Insurance 

This type of insurance is designed to cover the expense of repairs to your vehicle if you got yourself in an accident. If you have a loan on the car, the loan issuer is likely to be in need that you have collision insurance. Collision insurance will only be optional if your car is paid off.

Furthermore, if you need enough money in the bank to cover the expense of a new car, then collision insurance may be unnecessary. This applies if you are driving an old car because cars depreciate so fast that many vehicles have their value of only a fraction of their purchase by the time the loan is paid in full. 

3. Mortgage Life Insurance 

This type of insurance is getting more popular lately, but it’s actually a policy you are better off without. Mortgage life insurance is a policy that ensures to cover your mortgage payment in unfortunate events. This sounds awesome if you’re married. However, it’s not.  This is the type of policy that only intersects with your existing insurance policies that you already have through your employer or through a separate policy. In the occurrence of death with a standard life insurance policy, the beneficiary of the policy receives the benefit that can be utilized for any expense they choose such as paying off your shared mortgage. 

Mortgage life insurance is an expensive and unnecessary addition to traditional life insurance. Just ask yourself, why do I have to pay an additional premium for something that a cost-effective life insurance policy that can cover. Generally, you’re better off with a great life insurance policy. You may always try to increase your life insurance coverage to offset your mortgage balance if that’s something you’re particularly worried about. 

4. Travel and Flight Insurance

This type of insurance has a policy that offers another kind of coverage that may necessitate you to pay a premium for insurance that could overlap with coverage or benefits you already own. Prior to spending money on travel insurance, you may examine your current health and life policies to check how accidents or injuries throughout your travel or flights are covered. So most likely there’s some type of coverage included. And in the incident of a catastrophe, your life insurance policy should cover you if you pass away while travelling. 

Also, talk to your credit card company to check if any travel protections are included with your account if you are using a credit card to book tickets or travel agreements. Plenty of credit card companies automatically offer benefits such as car rental insurance, lost baggage insurance, or travel insurance as part of your cardmember agreement. But you are free to purchase a small travel policy to cover the gaps in your existing coverage. 

5.Cancer/ Disease Insurance 

Today, critical illness coverage such as cancer insurance is becoming more popular due to cancer rates and awareness rise. However, is it really worth investing for? Although cancer treatment can really make a hole in your pocket and medical bills, we suggest that you hold off on taking out a cancer-specific insurance policy. 

Why? In most cases, a primary health insurance policy covers medical expenses related to cancer treatment. Plus, one surprising reason is that cancer insurance policies can be a waste of money since most cancer insurance doesn’t even cover skin cancer, which is a leading type of cancer around the world. And normally, cancer insurance doesn’t cover outpatient expenses related to cancer treatment. 

Whichever type of insurance you want to get, talk to your insurance broker and be sure you understand the benefits and limitations before buying a policy. 

Author Bio: Ivandrea Ollero is a daytime writer for Insurance Advisernet NZ, one of the largest and most trusted General Insurance businesses in New Zealand, providing leading insurance products, technology, and policy wordings. She is also a content crafter who researches and writes custom content about travel, fashion, finance, business, home improvements, health, and beauty, in order to provide helpful information and tips for her readers. Ivandrea graduated from St. Scholastica’s College, Manila, with a Bachelor’s Degree in Broadcast Journalism in 2016.