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Transcript: Bad insurance buys

Anchor Intro: Modern life isn't cheap, so it pays to make sure you're not wasting money on anything. And that includes insurance. Are you paying for unnecessary insurance? Bankrate.com helps you find out.

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Voice over 1: Wherever you shop, you will always be encouraged to buy things you don't need. They're called impulse buys and they're designed to make extra profit for sellers.

Standup 1: But stores aren't the only place you'll find impulse buys: You might find one in your mailbox: Open a credit card or mortgage statement -- they often want you to buy credit life insurance.

Voice over 2: Credit Life is insurance that pays off a specific debt if you should die, like a credit card debt or a mortgage. Sounds reasonable, which is why so many people sign up for it.

Standup 2: But credit life is a high-margin profit-maker for insurance companies and normally a bad buy for you. Regular term life insurance is usually much cheaper in the long run.

Voice over 3: Another popular but bad impulse insurance buy is buying a life insurance policy on your children.

Standup 3: The purpose of life insurance is to replace lost income if the insured person dies. So, unless you're living off of your kid's income, it's normally not a smart buy.

Voice over 4: While it's technically not insurance, rental car coverage is often unnecessary. See if your car policy or credit cards cover you before you leave home. Specific disease insurance isn't normally worth what it costs, especially if you have decent health coverage.

Standup: Bottom line? You don't have to go to the store to find impulse buys. Understanding insurance is a good policy that helps insure you don't waste money. For Bankrate.com, I'm Kristin Arnold.

Bankrate.com's corrections policy
-- Posted: Dec. 31, 2008
 
 
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