Insurance companies will try to get consumers to insure everything possible. Of course, it could be argued that purchasing insurance is itself taking a financial risk, especially when you are on a tight budget. What if the item covered is never lost or destroyed? Then all the premiums you paid will have gone down the drain. Additionally, statistical reports show that trillions of dollars are spent each year on various things consumers feel the need to protect with insurance, yet millions of claims are refused for one reason or another by insurance companies. This makes one wonder if it is really worth it making all the extra payments.

Granted, there are some types of insurance coverage that are well worth buying, such as whole life insurance; even though you will not get the chance to reap the benefits of life insurance in your lifetime, leaving something substantial for chosen beneficiaries like your children and other family members can be invaluable. Auto insurance is also vital. However, there are some insurance policies that are not worth spending money on. These are five of the most obvious such examples.

1: Rental Car Insurance

Sign the papers to rent a car and rental car insurance most definitely will be offered. However, assuming that you already have your own auto insurance, that coverage extends to all vehicles you drive. Car rental insurance is simply paying twice for the same coverage.

2: Term Life Insurance

Term life insurance is comparatively cheap, and it is often offered without the hassles of medical checkups. This makes it attractive to many budget-conscious consumers. What many people fail to realize is that the coverage is for a specified term, and if death does not occur during that period of time, there is no payout and all monies paid into the premium go to waste. Although some financial analysts do recommend term life insurance, many feel that whole life insurance — since it is actually worth something — is a far better investment.

3: Credit Card Protection Insurance

Credit card protection insurance is supposed to protect against theft and fraudulent use of a credit card. While this may seem to be a smart idea since it eliminates the burden off having to pay for the fraudulently used funds, it is not worth buying. Consumers are already protected by federal consumer protection laws governing identity theft.

4: Flight Insurance

Flight insurance protects you from loss if you miss a flight. While this happening is certainly possible, its odds are sufficiently low that the cost of the insurance is a waste of money. It also protects against a plane crash, which is not necessary if you already have life or accidental death insurance.

5: Extended Warranty Insurance

Extended warranty insurance is often offered on major purchases such as appliances. However, virtually any appliances, electronics and similar products will be sold with preexisting manufacturer’s warranties. Most experts believe that purchasing additional warranties on top of these, therefore, is a waste of money.

Guest post contributed by Caleb Nicks, on behalf of IRA Market.

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