Do not spend your hard earned money on useless insurance policies
Insurance policies help to mitigate various risks in life. They are really helpful when you need them. However, a lot of times, people purchase insurance policies with lots of misconceptions in mind. While not having sufficient insurance coverage can lead you to a financial disaster, purchasing unnecessary insurance coverage can have a terrible impact on your finances as well.
3 Reasons why people purchase more coverage than what is required
Check out the 3 reasons why people buy more coverage than what they actually need in life.
- People buy more insurance coverage on the wrong assumption that they’re likely to make frequent claims.
- People want to get additional security. They want to safeguard their life. They’re least bothered about the expenses.
- People just want to get rid of the high deductibles.
Types of unnecessary insurance policies you may not buy
Here are some types of insurance policies which you can skip buying from the insurers.
1. Divorce insurance: Are you afraid that your marriage may not work out? Are you quite sure that you’ll live with your spouse only for a few years? If yes, then there’s divorce insurance policy for you. However, if you’re really smart, then you’ll do the wise thing. You’ll save money in your emergency fund to meet the divorce expenses.
2. Flight insurance: Are you scared of boarding a flight? Are you afraid that the airplane will crash and you’ll lose your life? Do you therefore feel that it is extremely important to purchase flight insurance?
Most financial experts feel that flight insurance is completely unnecessary. Firstly, it is very expensive. Secondly, the chances of an air crash are negligible.
3. Disease insurance: Don’t buy multiple insurance policies for every disease you know about. Instead purchase a health insurance policy that will give coverage for any kind of disease you may encounter in future.
4. Rental car insurance: Several people are scared of being charged a huge amount by the rental car insurance company. Hence, they feel the need for purchasing the rental car insurance policy. However, they forget the fact that most auto insurers give this coverage to the policy holders. If you’ve any doubt about it, then you can have a talk with the auto insurance company. Apart from the auto insurers, several credit card companies also offer this coverage to the consumers.
5. Water line coverage: You don’t need this coverage if you live in a newly built home. In case, your house is situated in a nuclear settlement, then also you don’t need to spend a huge amount when your water pipe gets damaged. You can repair it within a few thousands of dollars. This is because the water line that comes from the street runs for a short distance.
Finally, if you don’t dwell in a flood plain area, then there’s no need to purchase a flood insurance policy. If none of the homes have been ruined or destructed due to floods, then chances are less that your house would get affected by flood.