Is it just me but are certain types of Insurance just scams?

Question

If you agree with me what types are?

Answer 1

Well, if you look at the amount paid in premiums vs. the probablility of the event happening or the payout, yes.

Some good examples are:
* Credit card or store card disability insurance. Premiums are astronomical compared to the payoff. Also, most people who work are covered by disability insurance, which would cover this cost at a much lower premium.
* AD&D (Accidental Death and Dismemberment) policies or riders. Statistically unlikely to happen. But, people get these anyway, since it isn't too expensive.

Conversely, ALWAYS take the life insurance they offer you at work, unless you already have more than enough personal insurance. The premiums are very, very low. However, make sure you have some personal insurance outside of work as well. You will eventually leave the job, or retire, and converting these policies requires an astronomical premium when you are older.

For any insurance, do research and decide if you are investing your premium money wisely.

Answer 2

A lot of insurance isn't a really good idea for most people. The only "must have" insurances are-

Life insurance- this is a must for most people but you actually only need it if you have a parent, spouse/ partner, or children who rely on your income. The only smart life insurance to have is term life. Never get whole or universal coverage.

Auto insurance- must have because it's the law. And if you have a home or other assets, it's smart to have good coverage. Otherwise, if you're got a clunker or not a lot that could be taken in a lawsuit, go to PLPD if you can.

Disability and health insurance- most people don't have it because it's digustingly expensive but it really is a "must have" for obvious reasons. A note on disability insurance- don't get insurance on specific illnesses (like cancer) and don't get insurance that covers you if you can't get any job- get what covers you if you can't work -your- profession.

Home/renters insurance- Home owner's insurance most people have to have because of their mortgage and it's good to have (who wouldn't want to protect the biggest investment in their life) However, renters insurance is only worth it if you have a lot of money in things they cover (computers, furs, guns, silverware, ect seem to be a standard)

The rest of insurances are usually just, well, someone trying to sell you something.

Answer 3

The outright scams are already listed, but I think car insurance is as well (why mandatory?). I would rather take a GW approach to SS and save the money I pay in my own account to pay for my own damages.
Safe Driver Credits don't save premium increases from fraud!
The optional insurance for autos like "back up transportation" is a scam, my Dad was paying something like $74 a month and I told him to drop it right now!

Answer 4

I've always wanted to start a 'catastrophic meteor' insurance company. The policies would pay $1,000,000 in the event of a collision with world-ending meteor.

I think I would have a hard time getting that past the regulators and a hard time selling the policies. But it would be 100% profit.

Answer 5

Yes, I agree. For example: a lot of the disability/credit protection insurance policies are not as useful as they seem. Most times, they only pay out 90 days later - hello?! 90 day wait? I need my money now! - and you have to go through hoops to prove you don't have the income anymore, and often times get denied for a technicality.

Answer 6

Viaticals. Whole life insurance. Universal life insurance. Social Security (it's just a big Ponzi scheme, after all). Those are the ones I can think of easily.

Answer 7

Yes, some are so you really have to do the research on them. I know I fell victim to one company. Thank G it wasn't for a long time only a couple of months. Becareful