Are you overpaying for insurance?
Many Americans find their income does not stretch as far as it used to. Costs are rising for everything, making it crucial 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 do not want to spend more than is necessary. What do we really require for protection from financial insecurity?
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
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.
Take a close look at your next car insurance statement. You’ll see that a certain amount of your payment goes toward coverage of both liability and collision protections. While you are legally obligated to carry the former, the latter might not be necessary.
Collision coverage is earmarked for repairing or replacing your vehicle. If you drive an older model, experts indicate it might be unnecessary given how fast vehicles depreciate.
Critical illness coverage
Critical care coverage is designed to offset the high deductibles and out of pocket costs of serious illnesses. Offered by a third of U.S. businesses, employees essentially pay modest rates for modest benefits.
While having supplemental income when fighting cancer or ALS is appealing, experts advise caution. Policies are often laden with precise definitions and exclusions. Furthermore, benefits are reduced with age.
Experts say that a better option might be opening a health savings account or securing additional disability coverage.
Cell phone insurance
Given how much we pay for and rely on our cell phones, insurance might make sense. However, those in the know indicate that the need for cell phone insurance depends on the person.
If a person is likely to lose the phone, insurance might be worthwhile. However, if the concern is cracking the screen, a $10 protector may be a better investment.
Those who decide to proceed with purchasing various insurance policies should at least check the terms of warranties first. Consumers should also understand that while the premiums are potentially not too high, the deductible can be substantial.
Have questions about your insurance policies?
If you have questions about your insurance policies or claims, schedule a completely free disability policy analysis and free claim consultation with one of DarrasLaw’s stellar long-term disability attorneys or nationally recognized ERISA disability lawyers today by calling (800) 458-4577 or contacting us online.