Shopping insurance coverage protecting property is very important. But that doesn’t mean it’s a good idea to buy every insurance policy that’s available for purchase.
In fact, there are several types of coverage that most people don’t want and which are nothing but a waste of money in most cases.
So what are these unnecessary policies? Here are three types of insurance that are often best left out.
1. Cash life insurance
Mortgage life insurance is a special type of policy that aims to ensure that the mortgage can be paid off after a person’s death. They are often sold to people who want to make sure their loved ones don’t move if they pass.
While buying such protection may seem like a smart move, the reality is that it is often a bad buy. The benefit of the policy decreases over time as people pay off their loans. And it does not provide any money to do other things that the family may want after death.
In most cases it is better to just buy the fixed time life insurance The policy is large enough to cover the death benefit of the loan and replace the policyholder’s money if they pass. This can be cheaper than home life insurance and the cost of the death benefit will remain the same as long as the policy is in force, instead of going down if the loan is repaid.
2. Theft insurance
Identity theft insurance covers the costs associated with identity theft. This type of policy can reimburse the victim of identity theft for any financial loss due to the theft. It can also help cover expenses related to recovery.
While this may seem like a good buy, the reality is that the annual premiums you pay for this policy are far greater than what you could lose if your name is actually stolen.
This is because there are many safeguards in place to ensure that consumers are not responsible for fraudulent use of their credit or debit cards. And there are policies that allow people to remove negative information from their credit report at no cost.
Instead of paying for identity theft insurance, people should know the terms of their credit and debit card agreements to report fraud immediately. And they should take advantage of the free features offered by a Federal Trade Commission if they are caught stealing.
3. Avoid credit card loss
Credit card loss protection insurance is marketed to consumers with the promise of protecting them from unauthorized use of their credit cards. But the reality is that consumers are already protected and their liability is less than $50 (and most lenders limit their loss to $0).
The The cost of the FTC He has described the type of insurance as “useless” and has encouraged people not to buy it.
Avoiding the three types of insurance is the best option and consumers should generally avoid all these policies and instead spend their money on products that are worth buying and that protect their property.
The Ascent’s best credit cards
We’ve ranked the most popular brands to come up with the best options to find a place in your wallet. These premium options have many features, such as sign-up bonuses, 0% APR promotions, and powerful rewards. Get started today with The Ascent’s best credit cards.
We are firm believers in the Code of Conduct, which is why the editorial opinions are our own and have not been reviewed, endorsed, or approved by the advertisers involved. The Ascent does not cover all the offers in the market. The editorial content from The Ascent differs from The Motley Fool’s editorial content and is produced by a different team of experts. The Motley Fool has disclosure process.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.