Many of us overspend on insurance policies. Consumer Reports tells us the policies we don't need so as to pocket a lot of excess change.
• Credit insurance promises to pay off what you owe a lender if you die or become financially disabled. However, this type can be more expensive than regular life insurance. Consumer Reports offers the following: If, for example, you pay $370 on a $50,000 loan, for the same amount in term life insurance, you'll only pay $92 yearly, depending upon age and health. Huge difference, huh?
• Pet insurance comes with deductibles, yearly caps, and all the same amenities and exclusions we humans pay for ourselves. Again, CR suggests we budget $200 to $300 a year for pet care. (Obviously, if your pet has serious illnesses, this figure won't be nearly enough.)
• Flight insurance is a type you don't need to purchase extra. If you use a charge card to pay for the ticket, most offer death benefits to your beneficiaries if the plane crashes. Also, paying for a term life policy often can be cheaper than the flight insurance.
• Cellphone insurance replaces your cell if it's lost, stolen or accidently damaged; monthly premiums run about $5 to $7. If you keep your phone for up to 18 months, according to CR, you'll have paid anywhere from $115 to $325. While this will either pay or help to pay for a smart phone, once that length of time passes, you'll be in line for a new phone anyway, if your plan stipulates.
• A dread disease policy is the one area with which I strongly disagree with Consumer Reports. As the child and sister of insurance agents and, more importantly, having had "dread" diseases during my lifetime, I am glad to pay this monthly premium on the off chance I'll be struck with cancer or some such disease. On the other hand, because this kind of policy doesn't cover more common illnesses, such as pneumonia, CR urges instead to have on hand comprehensive health and major medical insurance. (I have these, too, in addition to the dread-disease policy.)
Ellen Phillips is a retired English teacher who has written two consumer-oriented books. Her Consumer Watch column appears every Saturday. Email her at consumer watch@timesfree press.com.