Types of Insurance You do Not Need

By | March 25, 2013

When you are saving up towards your retirement, it is important to hold on to as much money as possible. Life is full of charges; between the expense of day-to-day living and necessary payments coming out of our accounts each month, your savings could soon run dry. Insurance in particular can be a major drain on our finances, with so many different types of it out there. Thankfully, many types of insurance are in-fact of little use to us in our everyday lives and avoiding them can help you reach the dream of retirement that little bit sooner and with that little bit of extra financial security.

Identity Theft Insurance

Ironically, identity theft insurance will often fail to provide any cover against actually becoming a victim of it or do anything in the way of replacing any money lost. It usually focusses more on covering expenses like legal costs involved in dealing with the issue. Opting instead for an account or credit card that provides free assistance with cases of identity theft can save a lot of money.

Payment Protection Insurance

Better known as PPI, Payment Protection Insurance is sold by banks alongside borrowed money; like a loan, mortgage or credit card. It is supposed to help consumers keep on top of their payments if they become ill or unable to work for some reason. In reality, the majority of PPI policies were completely mis-sold; people had no idea they were paying for them or had been led to believe they were compulsory when in-fact, they are optional and for many, best avoided.

For those already paying for PPI who had no need or want for it, companies that specialise in claiming money back can assist in gaining reimbursement.

Mortgage Life Insurance

This type of insurance is designed to help your spouse or family pay the mortgage on your home if you were to die. It might at first sound like a good idea but most people already have separate life insurance, which often provides a bigger pay out and is usually used to cover expenses such as a mortgage anyway. When you already pay money to protect your loved ones if you die, why pay for a second policy that will only overlap an existing one?

Pet Insurance

This is a controversial one as vet bills can be expensive. It is however, very difficult to find pet insurance that covers all bases; some will cover emergencies – like broken limbs – while others provide cover more in the way of annual check-ups etc. Very few will actually cover dental care or long-term illnesses like cancer. Given that these are the cases that often have the most expensive treatments, you would still need to pay large sums of money, meaning that sometimes, having pet insurance can prove to be an unnecessary burden on your finances.

Phone Insurance

Insuring your phone against damage, loss or theft is not necessarily a bad thing but it has emerged that complaints in the UK about poor policies and a lack of proper service from insurers regarding mobile phones have increased. Complaints have been flooding in to the Financial Ombudsman Service – who deal with financial disputes – that companies have been refusing to pay out. With many policies full of loopholes and unclear exceptions and exclusions to the cover, sometimes they are best not used, unless careful reading of the small print has been made long before agreeing to any deal.

Insurance can provide very useful cover and having it can give you peace of mind against a number of potential outcomes. It is important to pick and choose the ones that are right for you however, as not everyone requires cover for every possibility. Being selective can save a lot of money, which in turn can make for a much more comfortable retirement.