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Some types of insurance you just can't live without, while others are generally a waste of money, a new report suggests.
With these unnecessary insurance plans, "small threats are hyped, overpriced premiums seem reasonable when chopped into daily installments, and promises shrink in the fine print," Consumer Reports warns in its May issue.
The magazine's editors identified specific types of insurance that aren't worth the cost. Common unneeded insurance plans include:
Cell phone insurance: $5-$7/month
Before you activate a new cell phone, you're probably asked to consider insurance in case your phone gets lost, stolen, or damaged. But such calamities only strike about 1 in 5 cell phone users, Consumer Reports found. Also, cell phone companies may just replace your insured phone with a refurbished model.
Identity theft insurance: $120-$300/year
ID theft insurance plans may sound good, promising up to $1 million in insurance if your identity is ever stolen. But under federal laws, a consumer generally does not have to pay for an identity thief's fraudulent activity. Your efforts are better spent by freezing your credit reports and monitoring your accounts, Consumer Reports says.
Child life insurance: $1/week
Those TV commercials offering a "head start" on child life insurance are generally a waste of money, according to Consumer Reports. "The purpose of life insurance is to protect dependents, so child life insurance is unnecessary," the magazine advises.
Flight life insurance: Prices vary
This type of insurance promises to pay your named beneficiaries if you're killed in a plane crash. Consumer Reports says a term life insurance policy is better for this purpose.
Pet insurance: Prices vary
A Consumer Reports analysis of nine pet insurance plans found none paid off in the long run. Don't waste your money buying this unnecessary insurance: Instead, just budget about $300/year for pet care, the magazine suggests.