17 Insurance Products That Are A Total Waste Of Money

A factor in virtually everyone's budgetary math, insurance coverage is a crucial part of responsible financial management and emergency preparedness. There are always going to be bumps in the road, and with insurance protection, the stress of dealing with any number of potentially expensive emergencies can fall away and allow you to think clearly. Getting things back in order and returning to your routine is essential, especially for those with young children or people living paycheck to paycheck. Emergencies that create financial hardship can lead to lasting delays in planning other features of typical life. An emergency with your car or a hospital visit could see you struggling to make ends meet in the short term, and perhaps even delay big purchases farther out like a grand vacation or a new appliance that your home desperately needs.

Insurance, on the whole, is a quality means of defraying emergency expenses. However, not all insurance products offer the same layer of quality coverage. In many instances, opting for additional protections does more harm than good. For instance, veterinary care coverage for your pet often won't allow you to break even on the expenses that you pay out throughout your dog or cat's life. The coverage can ease your worry over potential future emergency care, but the financials don't tend to make sense when viewed on a wider scale. That and other insurance products often end up wasting your money. Here are some that you should likely avoid.

Another type of insurance that acts as a redundant layer of protection for buyers and a simple money grab for the seller is the flight insurance upsell. This is a product that many airlines now offer during the checkout phase of travel booking. Utilizing the social proof concept, airlines are often quick to advertise how many people have added travel insurance to their reservations in the last day or hour. The purpose is to influence new buyers into spending a little extra money on this coverage feature. However, flight insurance is a redundancy you don't need. If your flight is canceled, the airline will have to accommodate you during any delay or refund the price of your ticket altogether. There's no need to purchase additional insurance to protect you against these kinds of delays or setbacks.

On a more somber note, in the event of a crash that injures or kills passengers, airlines are on the hook to pay out benefits to injured travelers or their beneficiaries without the need for travelers to add on any contingency coverage. Flight insurance is therefore just a way to charge you a little more for the same ticket. On another note, airline reservations are yet another product that should always be purchased with a specialized rewards credit card. Airline specific cards offer free checked bags, upgrade opportunities, and many other perks that you don't have to pay for as long as you pay with your card.

Travel insurance is often characterized more by what it excludes rather than what is covered. Travel insurance may seem like a great idea as you plan a fantastic holiday or quick weekend getaway with friends or family. Having this fallback allows you to really kick loose and enjoy your vacation. Travel insurance may be used to cover the expense of lost baggage, injury or health complications while away, and much more. But it's important to read the fine print on any policy you're considering purchasing before committing to it.

This is because travel insurance is often riddled with exclusions and restrictions. A cursory reading of the terms can leave you thinking you're covered for all kinds of emergency needs only to be left holding the bag if a problem does arise during your trip. Additionally, many travel insurance companies make the reporting and reimbursement process exceedingly difficult and lengthy. As a result, you may have to bear the cost upfront and then work for weeks or months after the fact to be made whole—something that many insurance purchasers expect to avoid when opting for coverage.

Experts suggest that the cost of burial insurance relative to the benefits it offers is extremely slim. Some even go as far as to suggest that burial insurance products are predatory and should be avoided at all costs. The reality is that life insurance and other savings products can be used to offset the cost of burial and offer a more efficient use of your money. Life insurance policies can include an additional benefit to cover burial costs, and act as a more valuable option on the whole than specific insurance products aimed at this need.

Alternatively, there are plenty of other ways to plan for your end-of-life expenses. For one thing, anyone who isn't particularly concerned with how they are laid to rest might consider cremation rather than a traditional burial. Traditional funerals rack up an average bill between $7,000 and $12,000 while a cremation runs between $6,000 and $7,000, on average. This choice can save your loved ones a significant amount of money. But no matter what you ultimately choose saving for this expense yourself rather than relying on an insurance product will often result in a more efficient management of one of life's inescapable features. You're simply likely to pay more by purchasing an insurance product than if you set money aside.

In the same way that a life insurance policy doesn't make tons of sense for someone in their older years, life insurance to cover children is equally wasteful spending. To put it bluntly, life insurance is a hedge against losing a source of income. Your children don't function as income-generating resources, and therefore a life insurance policy generally isn't useful. There are of course exceptions, and child actors and other young stars might consider this approach if they are contributing to family finances. Young ones born with chronic illnesses might also benefit from early coverage since a policy later in life may be far more expensive or entirely unavailable. But for the vast majority of individual families, there is no need to take out a life insurance policy to protect some sort of financial value in your children.

Instead, a great way to help set your children on a great financial path involves investing on their behalf. Setting money aside in a savings account or even an investment account will give them a great jumpstart on their future and might even serve as a great opportunity to teach responsible money management lessons along the way.

Older cars aren't generally worth much in relation to newer models. The older your car gets the more value it loses. This phenomenon is something that everyone understands, but it isn't typically felt as a factor in day-to-day driving. The only time your car's financial value matters at all happens either when you consider trading it in or when you've been involved in an accident. Many people opt to include multiple types of car insurance coverage so that they can recover as much money as possible when the time comes to repair or replace a damaged vehicle. However, collision insurance is something that people should become less interested in adding as their car ages.

The deductible for your collision insurance is often decently high, meaning your insurance company will decline to cover some minor accidents and charge you a hefty deductible fee in order to take care of larger ones. If you find yourself driving something that isn't worth much, you may end up paying considerably more every month for your insurance coverage then you'll ultimately recover in the event of an accident. Instead, people who drive older vehicles should select the cheapest possible coverage option and then start putting away cash for a replacement or emergency repairs on their own. Rather than involving your insurance company for what ultimately won't be very beneficial and may raise your rates over the long term, prepare on your own to mitigate the damage from a potential collision.

Retail stores are often quick to offer additional warranty protection for large electronics purchases and other gadgets like headphones, game consoles, and other devices. The sales pitch is typically the same, no matter where you do your shopping. Based on the purchase price you'll be offered an extended warranty plan that might last a year or more at a seemingly reasonable cost. However, most electronic devices today are sold with fairly substantial manufacturer's warranty coverage already in place. More importantly, if you're purchasing a device from a reputable brand then any potential breakage issue you might face will almost certainly occur directly after you start using the new gadget rather than a year or more down the line. It's possible to get unlucky and purchase a defective unit, but any defects present will showcase themselves virtually immediately.

The fact is that warranties from manufacturers offer more than enough protection to ensure that your gear won't break and leave you in a lurch. As well, you may also have the opportunity to take advantage of coverage from your credit card provider if you purchased the item with a card that includes this added insurance product. There's simply no need for extra insurance that comes at a cost beyond the unit's purchase price.

A home warranty policy can seem like a great idea, especially for landlords and new homeowners who don't want to have to deal with the hassle and cost involved in fixing broken-down appliances and other routine maintenance issues in the home. However, home warranty policies often restrict your choice when it comes to selecting technicians to perform repair work at your property. This means that you'll have to select a handyman and technicians that are "in network," as it were, and this can leave you with little to no choice in the decision to select the person who will care for your home.

Perhaps more importantly, homeowners are often charged a call-out fee and when technicians arrive at the property they may ultimately decide that the problem isn't something that should be covered by the policy. In the same way that a health insurance provider might claim a preexisting condition and shirk responsibility, any number of added factors might contribute to a home warranty provider declining to pay for a repair as a result of some sort of operator error rather than a genuine defect in the appliance or item in question — whether legitimately or not.

Mechanical breakdown insurance is a policy that helps you get back on the road in the event of a non-accident-related issue with your vehicle. Breakdown coverage will support you when faced with a variety of mechanical issues under the hood and throughout the vehicle. However, these insurance products often incorporate plenty of restrictions and exclusions, and insurance companies are often quick to suggest that a problem in your vehicle isn't covered by the policy for one reason or another.

These claims can become pretty inventive and drivers across the country will likely know someone whose repair work was initially or ultimately not covered by an insurance policy that seemingly should have kicked into effect. As with many other insurance products found here, you might be better served in pricing out a policy and then simply depositing that amount every month into a savings account set aside specifically to care for your vehicle.