Gustavo Franko
There are a lot of unforeseen circumstances that come with living in this world and that is why it has become crucial to insure yourself. However, do you think all insurance are needed? – Hell no.
There is virtually some insurance that isn’t a good idea to subscribe to as it is a total waste of time and resources.
Monies that would be paid to insurance companies that fall under this category could be channeled to your emergency fund to use if a loss occurs. Below is a list of insurance products that often don’t make sense for many people:
1. Final-expense coverage Insurance:
Final expense insurance has been defined as a whole life insurance policy that has a small death benefit and is as well easier to get approved for. In other words, Final expense insurance can also be referred to as “funeral insurance,” or “burial insurance.”
With this explanation, do you think everyone needs to subscribe to this policy? – Damn no!
This policy has a high advertisement avenue for individuals above 50 with the notion that they are near their graves. If you have little debt and quite huge assets, don’t bother subscribing as it may become a waste of resources.
On the other hand, if you are indebted and want to spare your families and friends the stress of having to give you a befitting burial, then you can be part of this insurance scheme.
2. Life insurance for kids or grandkids:
“Your children are not sources of income, so why do you need to insure them?” – George Gagliardi, a CFP at Coromandel Wealth Management, in Lexington, Massachusetts, raised a good question when quizzed about the necessity of insuring one’s kids or grandkids.
Such insurance is often sold as terms and has little or no cash value. Parents who are worried about the future of their kids do subscribe to them so that they would receive an amount of aid to cater for medical costs and or funeral costs should the unfortunate happen.
3. Disability insurance as you age:
‘Having disability insurance is a good thing to do but people most of the time do extend it longer than the rightful’ – This was observed by Seth Benjamin Mullikin, a CFP at Lattice Financial LLC in Charlotte, North Carolina.
This insurance wouldn’t pay you after you become 65-years-old. That is to say, the number of years that you will collect from it after a disabling injury or illness goes down over time.
So basically, someone who subscribed at a youthful age and got disabled would collect more than one who did so at his or her old age.
4. GAP insurance:
GAP which was abbreviated from ‘Guaranteed Asset Protection’ insurance main work is to pay the difference between the amount allowed for the total loss of your new or used car and the balance on your loan or lease.
The sad news is that, if you put less than 20 percent down and choose to pay it off over a long period of for example 5 years, then ‘Guaranteed Asset Protection’ insurance may make a lot of sense in this regard.
If not, then you may just be wasting money.
5. Rental-car insurance:
Many auto insurances cover you for car rentals. If that is your case, then decline the policies that the rental-car company would offer you. One Owen explained that ‘Most auto insurance policies do cover rentals’.
In fact, your credit card may provide rental-car insurance but you ought to read the fine print in order to ascertain things for yourself.
6. Flight insurance:
Here comes another needless insurance to many and we will prove to you why. Many airlines companies allow a rebook at no or lesser amount should you miss your flight due to an emergency or accident.
Do you still want to subscribe to the ‘Flight Insurance?’
“If you must cancel a flight because of a significant emergency, hospitalization or a death in the immediate family; airlines will nearly always let you rebook,” Gagliardi revealed in a statement.
Domestic flight insurance has always been unnecessary as compared to the opposite.
7. Dent insurance:
With the occurrence of dents and dings, this insurance would cover it. The premiums usually range between $300 and $600 per year. Now, should you have a 1-inch dent, you may be required to spend $60 to $110 fixing it. It will also have an additional $25 to $50 per half an inch.
And you’ll still have to pay your deductible, which is likely to be $500 to $1,000. Do the math; it’s probably not worth it at all.
8. Trip insurance:
Things are now getting more complicated when you’re planning a trip to another country or taking a cruise due to the COVID-19. As part of safety precautions, you may be required to show proof of adequate medical insurance to meet COVID-19 entry requirements.
Along with unexpected medical bills, etc., trip insurance can cover damaged or stolen luggage, expenses you’d have should the trip be interrupted for reasons beyond your control.
9. Life insurance after you retire:
Life insurance is meant to protect people you love from losing income if anything is to happen to you. At retirement, one can attest to the fact that your income slashes down and does not come as when you were actively working.
Geoffrey Owen, a CFP at Front Porch Financial Advisory in Charlotte, North Carolina stated that: ‘The need for life insurance depends on your age and financial situation’ which is a good point made.
This insurance only counts if you have debts and your family entirely depends on you for survival. However, with minimal or no debt at all after you retire, there is no need to roll on life insurance.
10. Mortgage life insurance:
For this type of insurance, the older you get and the more you are required to pay down your mortgage, the less you need this type of insurance coverage. The premiums remain the same and do not decrease thereby making things harder for you.
Also, unlike a life insurance policy where your family receives some additional financial benefit, Mortgage life insurance isn’t so. Your loved ones would receive virtually no additional financial benefit.
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