Open Bank Account
Master Your Money
Get a Credit Card
Certificate of Deposit
Money Market Accounts
Best Savings Accounts
Best Checking Accounts
Create a Financial Plan
FIND THE BEST BANK FOR YOU
Best Banks 2023
Top Money Experts
Best Banks 2023
Financially Savvy Female
Live Richer Podcast
Financially Savvy Female
Saving & Spending
Financially Savvy Female
The Future of Finance
Retirement at Any Age
Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all available deposit, investment, loan or credit products.
There are so many types of insurance available to consumers. Life insurance (various kinds), private mortgage insurance and pet insurance are just some of the options out there.
Also See: 6 Vacation Splurges You’ll Almost Always Regret
Learn: How To Build Your Savings From Scratch
It can be overwhelming, and often you may wonder, “The Ways to Wealth. “Instead, purchasing term life insurance and investing the difference into low-cost index funds can yield better results with more flexibility and lower costs.”
Linda Chavez, founder and CEO of Seniors Life Insurance Finder, said consumers who buy whole life insurance often end up paying more for the same level of coverage offered by other types of life insurance.
Take Our Poll: Do You Think AI Will Replace Your Job?
And then you’ve got premium term life insurance, which in the experience of Seniors Mutual founder Kelly Maxwell is the No. 1 insurance people most regret.
“These are types of policies that increase either every year or every five years,” Maxwell said. “We replace a lot of consumer policies that have those with level premium term products. While the increasing policies might start really low, they start to increase very rapidly over time, leading many people to complain about money ‘going down the drain.’ It is almost always worth it to look at level premium options, as they will be cheaper in the long run.”
When you’re renting a car, it’s important to be fully covered, but you might be duplicating coverage by adding on car rental damage insurance, which is often unnecessary if you already have car insurance.
“Primary auto insurance or credit card benefits typically cover rental cars,” Weiss said. “Some coverage is also extended in a lot of the premium credit cards on the market. Before opting for additional coverage on a rental car, check your existing policy and credit card coverage — you’re likely to be fine without paying extra.”
How much are you willing to pay to ensure your old car that saw better days 100,000 miles ago? Think about it.
“Many drivers don’t understand that a claim payout with collision and comprehensive coverage is maxed out by the value of the car,” said Michael Orefice, SVP of operations at SmartFinancial. “If a car is totaled or stolen, the policyholder will only get what that car is worth on the day of the loss, maximum. If your car is worth $1,000 and so is your deductible, you won’t get any money back.
“You always have to pay the deductible; so, if your car isn’t worth at least a couple of thousand dollars more than a deductible, buying comprehensive and collision coverage is a total waste of money.”
So, do the math before buying coverages, and find out what your car is really worth by checking it in the Kelley Blue Book.
Private mortgage insurance (PMI) is usually required if you have a down payment of less than 20% when buying a home. Though it can help you qualify for a mortgage, it shouldn’t be a first resort.
“PMI can be expensive and may not provide much benefit if you have other forms of protection,” said Anokye Miller, financial advisor at Ambitious Investor. “If you have other ways to protect your investment in your home, such as a solid financial plan or a larger down payment, you may regret paying for PMI.”
Accidental death insurance is the ultimate “better safe than sorry” type of plan, but it might not be worth the expense.
“Accidental death insurance only pays out if you die in a specific type of accident, such as a car crash or a fall,” Miller said. “While it may seem like a good idea to have this extra protection, the odds of dying from an accident are relatively low, and you may be better off investing in a more comprehensive life insurance policy.”
Retailers often sell additional warranties that include the cost of fixing or replacing a product once the manufacturer’s guarantee has expired. But it can be a regrettable buy.
“Given that many devices might not require service or replacement over the extended warranty time frame, they can be pricey and might not be worth the money,” said Carl Jensen, the founder of Compare Banks.
Identity theft insurance provides financial protection for victims of identity theft. In an age when identity theft is rampant, it can seem like a smart purchase. But it might not be necessary.
“Following a theft, identity theft insurance may assist with the cost of recovering your personal information and financial standing,” Jensen said. “However, a lot of banks and credit card companies currently provide this kind of security for free or at a modest cost. Furthermore, the coverage could not be complete because it might not pay for all forms of identity theft or associated expenses.”
Some pet owners swear by pet insurance, but it’s really not ideal for all pet owners — especially not if your pet has pre-existing health conditions. This is a big caveat.
“Furthermore,” Jensen said, “certain policies could have a premium that must be met before coverage begins or have insurance constraints.”
Instead of investing in pet insurance, Brian Meiggs, founder of My Millennial Guide, recommends setting aside money each month in a dedicated savings account for your pet’s healthcare needs.
More From GOBankingRates
Share This Article:
Get advice on achieving your financial goals and stay up to date on the day’s top financial stories.
Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.
© 2023 GOBankingRates. All Right Reserved.
Sign up for our daily newsletter for the latest financial news and trending topics.