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The Top 5 Insurance Policies to Avoid

By: Anna Martin - Updated: 9 Sep 2012 | comments*Discuss
Life Health Policy Mortgage Identity

If you are looking to save money – and who isn’t these days? – shopping around for the best products to fulfil your insurance needs makes sense. For most individuals, investing in insurance means having peace of mind and being financially secure. Ensuring that your cash is invested wisely will not only save you money, but will also offer you the protection you really need.

For every type of insurance, you may be considering, there are many other kinds of insurance policies an insurer may be only too willing to tempt you with. Identifying your personal needs will enable you to make a sensible informed choice, but don’t be swayed by that salesperson patter.

Here Comes the Bride

You have been planning for months, and the big day is looming. What do you do if the weather suddenly changes dramatically and your big wedding day plans are spoilt? Wedding Insurance will cover any unplanned expenses you may find yourself having to pay out. If you need to reschedule the entire day your deposits will be returned. If your photographs are damaged the policy will cover the cost of reconvening your wedding party in order to take replacement photographs. The designer wedding dress is even protected.

Why you don’t need it:

  • The likelihood of there being such extreme weather changes is very small.
  • Planning your wedding with reputable service providers – photographer, caterer etc. -will offer you all the protection you need.
  • The one-time premium can be quite expensive.

Baby Blues

You buy life insurance to protect your family from financial loss, should anything unexpectedly happen to you. It will provide your loved ones with enough money to maintain the standard of living they are used to. Baby Life Insurance however, protects a newborn’s financial future. The policy promises to provide financial assistance should an illness suddenly strike, and will pay for funeral costs should the unimaginable occur.

Why you don’t need it:

  • Adult Life Insurance is designed to replace income lost by the breadwinner’s death.
  • Increasing the payout of your own policy will cover any baby/child expenditure.

Who Are You?

One of the fastest growing crimes, identity theft can affect anyone. Identity Theft Insurance will keep you up-to-date with information regarding your personal accounts, and will alert you if a new account is opened in your name. The policy will also cover loss of wages and any expenses you incur from having to take time off work to file reports and make follow-up calls. You will also have access to a helpline that will give you information and tips.

Why you don’t need it:

  • Your credit cards already provide you with in-built protection.
  • You can monitor your personal accounts yourself, online. This is free of charge.

Handle With Care

The number of men and women being diagnosed with cancer is steadily rising. If this happens to you Cancer Insurance will supplement your existing Health Insurance, to cover the cost of necessary treatments like chemotherapy, radiation and health examinations and tests.

Why you don’t need it:

  • These policies can be restrictive, and do not cover all types of cancer. One of the most common forms of cancer – skin – is generally excluded.
  • Some policies do not kick into affect until you have been receiving treatment for a year.

Safe As Houses

You move to a bigger home and soon start worrying about the increased mortgage payments. What would you do if something happened to you or your partner, and you couldn’t comfortably cover the regular mortgage repayments? Mortgage Life Insurance provides you with a loan in one lump sum, should one of you become unable to work and contribute to the payments.

Why you don’t need it:

  • It is expensive, and the payout in one lump sum makes the policy inflexible.
  • Homeowners would be better off using the proceeds from a standard Life Insurance policy to make the monthly repayments, and claim back the interest tax deduction.

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