14 useless insurance policies |
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11. Mortgage life insurance
Mortgage companies like to offer homeowners life insurance policies that pay off the old homestead when you kick the bucket.
"It's the same question: Who do you want your money to go to when you die?" says Hillebrand. "In a few cases, if you are
older and sicker and regular life insurance is going to be hard to get or more expensive, you might want a mortgage policy. But short of
that, I wouldn't recommend it.
"What you really want is well-priced term life to protect your family."
12. Optional group life insurance
Optional group life coverage can be a lifesaver for those whose health has rendered them uninsurable.
But there's the rub: If you are a healthy nonsmoker, being lumped with that high-risk pool can wipe out any cost savings
you might have realized with group coverage. What's more, should you leave your job, you can't take it with you.
Explore a term life policy first before you sign up. To find the right policy for you, check out
InsureMe, a Bankrate company.
13. Rental car damage insurance
Everybody has been there: You stand at the rental car counter and the clerk asks, "Do you wish to waive the optional coverage?"
Yes, amigo, you do.
"Your auto coverage extends automatically to a rental car," Hungelmann says. "If you have full coverage on at least one
vehicle, you won't need to buy optional coverage."
If you don't have full auto coverage in place, you're not necessarily stuck. Your umbrella home-life-auto policy may cover
rentals, and many credit card companies will provide first-dollar coverage on damages if you charge the rental on their card.
14. Scheduled property
Judicious use of "scheduling" -- singling out valuables like jewelry and artwork for individual underwriting -- can make quite a difference
in the event of a loss.
Take artwork, for example.
Most insurers offer the option to schedule artwork, even though most policies place no limit on coverage. If you scheduled
your prize painting for $20,000 and it is stolen, you get $20,000 from your insurer, even if the painting has doubled in value over the years.
If, however, you did not schedule it and can provide documentation (photos, receipts, appraisals, etc.) that it was worth
$20,000 at the time you insured it, you would receive $40,000 for its loss.
"If you're going to replace something, schedule it," Hungelmann says. "If you're not going to replace it and all you're
going to get for it is cash, why spend the money?"
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