It is true that no one knows what will happen in future and buying insurance policies to cover the financial loss, is a good option. However, there are certain insurance policies which you can do without or you need to do the necessary calculations in order to decide whether or not it is worth buying, or even if it's worth, how you can choose the best one. Here are 5 such insurance policies which you should think twice and do the necessary calculations before buying one.
- Insuring your wedding - Every one of you leave no stone unturned to have a perfect wedding and spend money as per your capability. So, it is quite obvious that you'd want to insure if anything goes wrong. However, you should know that you need to spend a lot of amount in order to buy the required coverage. Also, there are certain exclusions which are not covered under wedding insurance. So, it can be a better idea to purchase things with your credit card so that you get reimbursement protection if anything goes wrong and make reservations through reputable companies. This will help you have a great wedding without spending extra dime.
- Extended warranty for purchased items - When you buy an expensive item, most of the times, you'd be asked whether or not you'd like to opt for extended warranty. The advantage is that the repair cost is covered under that option. However, usually you need to pay about 15%-25% of the purchase price for the extended warranty; so, the higher your purchased item, the expensive is the warranty. Therefore, before saying âyes' for the extended warranty option, check out how much you need to pay for a repair work at a repair shop and then decide whether or not the extended warranty is worth an option.
- Insurance for your mobile phone - Your cell phone - one of your most essential and priced possessions, can be covered under a policy. However, you don't need it if you can take care of your phone and don't have the tendency to drop it suddenly. Even if you're looking for an insurance policy for your expensive cell phone, know that most of the policies don't cover the damage if it falls suddenly from your hand or there's water damage. Before buying a policy, also calculate how much you need to pay for the deductible in order to get the required coverage.
- Identity theft insurance - This insurance policy promises to pay for the financial damage occurred if you become a victim of identity theft. However, in reality, such an insurance policy usually never pays the money you lose; it only pays for the legal fees and the cost for mailing letters, if you become a victim. Moreover, here also, you need to pay a deductible for the required coverage. So, read the fine print before buying such a policy. A better option would be to take out a credit card with identity theft recovery services option and take necessary precautions to secure your identity from fraudsters.
- Insuring your travel - Travel insurance is worth buying since you may incur huge loss if a trip gets cancelled or need to come back suddenly. However, while buying one, check out the inclusions and exclusions mentioned in the policy, since most of the policies don't cover the cost if suddenly a Civil War breaks out at the place you're planning to visit. Moreover, the basic policies don't cover the cost if you need to cancel your trip due to a health issue, and to get that coverage, you need to purchase a relatively expensive policy. Therefore, read the terms and conditions carefully and buy a policy as per your requirement.
The bottom line is that requirement varies from one person to another. So, instead of getting the coverage your friend has opted, always do the calculations and read the terms and conditions, policy inclusions and exclusions, in order to buy the coverage as per your own need and requirement.