Are you the type of person who thinks that when it comes to insurance, it’s always worth buying in case something happens?
The truth is that there are certain types of insurance that are rarely used or cost more to purchase than they pay out in an emergency. Therefore, experts recommend a more rigorous evaluation before buying the following insurances:
1. Whole Life Insurance
Whole life insurance is a policy that provides coverage for the entire life of a person. In this case, a percentage of the premiums goes towards the “cash value growth,” which grows based on a rate set by the insurance provider.
The problem is that these premiums (what you pay monthly) can become very expensive, up to 10 times higher than term life insurance. The other issue is that the cash value growth does not generate a significantly higher return.
So, for most people, a term life insurance policy will likely work better. Wouldn’t it be more worthwhile to invest the excess premium amount you would pay for a whole life policy in investment funds that generate higher returns in the long run?
2. Extended Warranties Provided by Stores
Let’s say you buy a refrigerator. The manufacturer already offers you a warranty, which depending on the product, can be for a few months or even years. Additionally, the store where you are buying the refrigerator also offers you an extended warranty. So you think? I’ll take advantage of a longer coverage period, right? Not necessarily.
Often, the store’s warranty starts at the same time as the manufacturer’s. So, you don’t always increase your coverage time. Furthermore, some credit cards offer up to a year of warranty coverage for repairs, exchanges, and even refunds for certain products. Research before making the purchase!
3. Insurance for Rental Cars
When you are on vacation and rent a car, do you consider getting specific insurance for the rental car?
Usually, your auto insurance covers collision for a rental car. So, depending on the type of coverage you have, you are protected with your own insurance. Therefore, before renting a car, check with your insurer about your coverage for rental cars. You might not need that extra insurance offered by the rental car company.
Don’t forget to check with your credit card company as well, since many also offer rental car insurance.
4. Travel Insurance
You save all year for a vacation, so it makes sense that you want to protect yourself in case you can’t make the trip for some reason. However, purchasing travel insurance can increase the cost of the trip by hundreds of dollars, and it’s not always necessary, as you may already have protection.
Many credit cards, especially travel credit cards, offer insurance benefits as long as you use the card to book your trip.
Source: Yahoo.com