3 Types of Insurance You Don’t Need to Buy

Recently, while shopping for insurance I came across various agents who were ready to insure every possible risk I could think of. Some of the options they gave me made sense like Disability insurance, health insurance, but some of them were really absurd, like alien abduction, vampire attack.

The fear of unpredictable events sells insurance but that doesn't mean you keep on covering yourself for every possible risk, because that way you will land up paying premiums for events which are highly unlikely to happen. Today I will discuss 3 types of insurance which you don’t need to buy and in case you feel you require such protection, then you can add them in your existing insurance products.

Identity Theft Insurance:

Over the last few years there has been an exponential increase in credit card thefts or online frauds based on the misuse of your vital bank information. Taking advantage of this fear among users of plastic money, insurers have brought in a product to earn quick premium from you, i.e. Identity Theft Insurance. Your insurance agent might make you believe that you will be better off buying but wait read what exactly it covers.

Identity Theft insurance only covers the expenses you incur in case of financial fraud due to identity impersonation. Expenses like lawyer’s fees, getting reports from credit bureau etc. are covered under it. It DOESN'T pay for the amount of money that you have been doped off. I met a colleague recently who bought this cover and boasted about it in office, but the moment he was told that his loss due to theft won’t be covered he got agitated on his broker and wanted a refund !!!!

Disease Insurance:

Insurance brokers are busy cashing in on our fear of cancer, heart diseases and recent epidemics like Ebola. They have started selling policies specific to each of these critical illnesses separately. Don’t get swayed by their marketing pitch rather than spending thousands on covering yourself from each of these diseases, go for a good comprehensive health insurance. This way, you will be able to cover medical expenses of any of the diseases. Also it must be noted a premium for comprehensive medical insurance is less than cumulative cost of covering all the critical illness separately.

Also it has been reported in some quarters of media that insurers leave a loophole in policies dealing with critical illnesses so that they don’t have to give a complete payout against claim.

Automobile collision coverage for old motors:

As I have discussed in three types of car insurance, buying collision insurance for old cars is a waste in case you are too attached with your old motor, or you own a vintage beast. As car gets older its value depreciates and after few years its value might be too insignificant and remember insurance claim is based on present value of the car at the time of collision. Over the period of time you may realize that paying a premium for comprehensive auto insurance is hurting your pocket, and when that time arises you should go for third party insurance alone. Please note buying Third party Cover is a legal obligation for any machine driving on the road. Read more about what is covered under car insurance.


Buying any insurance is totally based on the purview of an individual, depending on his/her situation. But that doesn't mean you go on covering every possible thing you possess and give your hard earned money to insurers based on unverified fears. Sometimes getting a good investment scheme is better than paying your premiums, thus think a lot before getting any policy.

DO NOT GET DUPED BY INSURANCE MARKETERS. Read the policy documents carefully before buying it and don’t hesitate ask your the insurance agent all doubts beforehand.

Read More:
Insurance for Beginners
Why Pay as you drive insurance is best for you
Shocking Myths about Credit Cards

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