Insurance Coverage Not to Buy

Insurance Coverage Not to Buy

(text first published in 1994, source Consumer Federation of America’s).

The Consumer Federation of America’s Insurance Group is a non-profit, public interest organization that promotes the interests of insurance buyers. Here are some of its recommendations of insurance not worth buying:

Air travel insurance: It costs too much and pays back only about 10 cents for each dollar of premiums. It is not comprehensive. You’re more likely to die from a heart attack.

Life insurance if you’re single: If you have no dependents, there is no economic reason to buy life insurance since there is no economic catastrophe associated with your death.

Life insurance if you’re married with children and your spouse has a good job: If one of you dies, can the other get along on one income? If so, perhaps no life insurance is necessary beyond that which you have at work.

Mortgage insurance: You should use annual renewable term insurance to protect you and your family against all economic consequences of your death.

Insurance coverage not to buy. Photo by Elena

Insurance that pays only if you’re hurt or killed in a mugging: A classic example of “junk” insurance. This risk is covered by good life and health policies.

Contact lens insurance: The cost of a premium is about equal to the cost of a lens at a discount eyeglass store.

Cancer insurance: What good is a cancer insurance policy if you have a heart attack? To buy only specific illness coverage is like buying toothpaste one squeeze at a time.

Rental car insurance: Your own auto insurance policy probably covers you if you do damage to a rental car. Also, many credit cards cover this.

Life or health insurance sold to cover a car loan or other loan.

Rain insurance: It pays if it rains a lot on your vacations.

Health insurance that pays $100 a day while you are in the hospital in lieu of comprehensive coverage.

Health insurance on your pet.

(Source: Consumer Federation of America’s, text first published in 1994).