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Are you overpaying for insurance?

Your source for the latest health, disability and insurance news and tips.

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Without question, Friday reigns supreme as the best day of the workweek. The well-deserved weekend and paydars are near!. Indeed, Friday means you have money for everything from the mortgage and groceries to student loans and shopping.  

Sadly, our bi-weekly cash influx doesn't go as far as it used to. Costs are rising for everything, therefore we need to be more mindful about our investments. In other words, our hard-earned money needs to go towards what we really need.

One area where spending money can raise some questions is insurance. While we need it, we also don't want to spend more than is necessary. What do we really require for protection from financial ruin?

Interestingly, experts have identified some types of insurance that consumers might want to carefully consider -- or reconsider.          

Identity theft insurance

There is perhaps nothing more nightmarish than someone stealing your identity. In fact, once the problem is discovered, significant damage has likely already been done. There will be phone calls to make, documents to mail and perhaps even attorneys to see.

This perilous situation is where identity theft insurance comes in by covering the costs of reclaiming your financial identity. However, experts indicate that the scope of a policy may be somewhat limited for the amount paid. Policy terms must be carefully read and questions asked to determine if theft insurance is a worthwhile purchase.

Consumers can take steps to protect their identities:

  • Monitor bank and credit card accounts regularly
  • Secure your three free annual credit reports
  • Place a 90-day fraud alert on your credit file if something is amiss
  • Know that liability for unauthorized credit use is limited to $50 max under federal law

Credit insurance

There are several different kinds of credit insurance, including credit life insurance and credit disability insurance.

The former ensures that the balance of an auto loan or mortgage is paid should you die. Another way to look at it is that the lender, not your loved one, is the beneficiary. As for the latter, it covers loan payments if you can't work because of injury or illness.

The prevailing thought among professionals is that term life insurance is a better value over time. Furthermore, experts point out many employers already offer disability insurance that accomplishes the same for less.  

We'll continue this discussion next time ...

Source: CBS News, "14 kinds of insurance that can waste your money," April 27, 2017

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