Monday, December 27, 2004

This is a multi-part message in MIME format. ------=_NextPart_000_0003_01C4EACB.66D8C740 Content-Type: multipart/alternative; boundary="----=_NextPart_001_0004_01C4EACB.66D8C740" ------=_NextPart_001_0004_01C4EACB.66D8C740 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable 10 insurance policies you don't need Illustration by Bob Eckstein If you're like most people, you don't relish spending money on insurance. Sure, you need it, but it's not bright and shiny, you can't drive it, and no one is going to admire it. So it's all the more galling when you find out you've purchased insurance that you don't need. "Fear sells a lot of insurance," says Robert Hunter, director of insurance for the Consumer Federation of America, a nonprofit consumer-advocacy group of which Consumers Union, publisher of Consumer Reports, is a founding member. "A good rule of thumb is to purchase insurance only from an insurance provider. And buy policies that are comprehensive." Insurance should cover catastrophic losses that you'd be hard-pressed to cover on your own. So what do you need? A term-life policy to cover your contribution to the family's expenses; a comprehensive health policy (or membership in a managed-care plan); disability coverage to provide income when you can't work; and homeowners and auto insurance to replace lost property. If you've got those, you don't need the following 10 policies. 1 Mortgage life insurance. This policy, generally purchased from a lender, will pay off your mortgage if you die. The cost can be three to five times as much as comparable term-life insurance for a benefit whose value declines as the mortgage is paid down. Instead: Rely on term life. 2 Credit-card-loss protection. It pays off losses if your card is stolen and the thief goes on a spending spree. Plans cost $7 to $15 a month. But federal law limits your loss to $50 per card. Instead: Put credit-card numbers in a safe place, and report lost cards ASAP. 3 Car-rental insurance. For $8 to $11 a day, it covers damages to cars and people if you are in an accident while driving one of the rental agency's vehicles. Check to see if your credit card or your own auto policy has such coverage, says Sandy Praeger, insurance commissioner for Kansas. Instead: Don't bother. 4 Flight insurance. Specialty travel-insurance companies sell life-insurance policies that pay a benefit if you die (or are dismembered) in a plane crash. Depending on the amount of insurance you buy, you pay $15 to $60 per flight. Instead: Skip it. Term life will cover you if you die in a plane crash, and health insurance should cover medical expenses. 5 Cancer insurance. Marketed by specialty-insurance companies, these plans supplement health insurance for cancer-care costs. Annual premiums range from $200 to $3,000. Despite their high cost, the policies may not cover outpatient care. Instead: Chances are that your existing health insurance already covers cancer expenses, so forget about it. 6 Credit-life insurance. Credit-card companies, banks, and other organizations that finance a purchase or lend money offer policies that repay a loan if you die. Average payout is $4,500 for a yearly cost of $23, says William Burfeind, executive vice president of the Consumer Credit Insurance Association. That's a lot of money when a healthy, nonsmoking man of 40 can buy $100,000 of 10-year level term coverage for about $100 a year. Instead: Make sure you have enough term life to cover loan payments. 7 Credit disability insurance. This policy will pay minimum installments on a loan, typically up to 36 months, if you are disabled according to the terms of your policy. A policy may cost $21 per $1,000 of coverage. Instead: Make sure that your disability plan will cover your expenses, including any loan payments. 8 Involuntary unemployment insurance. Credit-card companies and other lenders market this policy which makes minimum payments on a credit card or car loan for 6 to 12 months if you lose your job. The cost: $0.70 per $100 of your credit-card balance. Instead: Create an emergency fund that will cover 3 to 6 months of your expenses. 9 Accidental-death insurance. Your heirs collect a benefit if you die in an accident. Cost runs about $600 a year. Only about 5 percent of those who die each year do so in accidents, however. Instead: Stick with term-life insurance, which pays regardless of cause of death. 10 Identity-theft insurance. Sold by banks, credit-card issuers, and specialty insurers, it covers the cost of repairing your credit and sometimes attorney's fees. Policies cost $20 to $180 a year for up to $25,000 in coverage, which does not include unauthorized charges or funds siphoned from accounts. Instead: Check your credit reports regularly. The FTC anticipates issuing a final rule this summer that would give consumers the right to order one free credit report a year from each of the three main credit bureaus. ------=_NextPart_001_0004_01C4EACB.66D8C740 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable 10 insurance policies you don't need Illustration by Bob Eckstein If you're like most people, you don't relish spending money on insurance. Sure, you need it, but it's not bright and shiny, you can't drive it, and no one is going to admire it. So it's all the more galling when you find out you've purchased insurance that you don't need. “Fear sells a lot of insurance,” says Robert Hunter, director of insurance for the Consumer Federation of America, a nonprofit consumer-advocacy group of which Consumers Union, publisher of Consumer Reports, is a founding member. “A good rule of thumb is to purchase insurance only from an insurance provider. And buy policies that are comprehensive.” Insurance should cover catastrophic losses that you'd be hard-pressed to cover on your own. So what do you need? A term-life policy to cover your contribution to the family's expenses; a comprehensive health policy (or membership in a managed-care plan); disability coverage to provide income when you can't work; and homeowners and auto insurance to replace lost property. If you've got those, you don't need the following 10 policies. 1 Mortgage life insurance. This policy, generally purchased from a lender, will pay off your mortgage if you die. The cost can be three to five times as much as comparable term-life insurance for a benefit whose value declines as the mortgage is paid down. Instead: Rely on term life. 2 Credit-card-loss protection. It pays off losses if your card is stolen and the thief goes on a spending spree. Plans cost $7 to $15 a month. But federal law limits your loss to $50 per card. Instead: Put credit-card numbers in a safe place, and report lost cards ASAP. 3 Car-rental insurance. For $8 to $11 a day, it covers damages to cars and people if you are in an accident while driving one of the rental agency's vehicles. Check to see if your credit card or your own auto policy has such coverage, says Sandy Praeger, insurance commissioner for Kansas. Instead: Don't bother. 4 Flight insurance. Specialty travel-insurance companies sell life-insurance policies that pay a benefit if you die (or are dismembered) in a plane crash. Depending on the amount of insurance you buy, you pay $15 to $60 per flight. Instead: Skip it. Term life will cover you if you die in a plane crash, and health insurance should cover medical expenses. 5 Cancer insurance. Marketed by specialty-insurance companies, these plans supplement health insurance for cancer-care costs. Annual premiums range from $200 to $3,000. Despite their high cost, the policies may not cover outpatient care. Instead: Chances are that your existing health insurance already covers cancer expenses, so forget about it. 6 Credit-life insurance. Credit-card companies, banks, and other organizations that finance a purchase or lend money offer policies that repay a loan if you die. Average payout is $4,500 for a yearly cost of $23, says William Burfeind, executive vice president of the Consumer Credit Insurance Association. That's a lot of money when a healthy, nonsmoking man of 40 can buy $100,000 of 10-year level term coverage for about $100 a year. Instead: Make sure you have enough term life to cover loan payments. 7 Credit disability insurance. This policy will pay minimum installments on a loan, typically up to 36 months, if you are disabled according to the terms of your policy. A policy may cost $21 per $1,000 of coverage. Instead: Make sure that your disability plan will cover your expenses, including any loan payments. 8 Involuntary unemployment insurance. Credit-card companies and other lenders market this policy which makes minimum payments on a credit card or car loan for 6 to 12 months if you lose your job. The cost: $0.70 per $100 of your credit-card balance. Instead: Create an emergency fund that will cover 3 to 6 months of your expenses. 9 Accidental-death insurance. Your heirs collect a benefit if you die in an accident. Cost runs about $600 a year. Only about 5 percent of those who die each year do so in accidents, however. Instead: Stick with term-life insurance, which pays regardless of cause of death. 10 Identity-theft insurance. Sold by banks, credit-card issuers, and specialty insurers, it covers the cost of repairing your credit and sometimes attorney's fees. Policies cost $20 to $180 a year for up to $25,000 in coverage, which does not include unauthorized charges or funds siphoned from accounts. Instead: Check your credit reports regularly. The FTC anticipates issuing a final rule this summer that would give consumers the right to order one free credit report a year from each of the three main credit bureaus. ------=_NextPart_001_0004_01C4EACB.66D8C740-- ------=_NextPart_000_0003_01C4EACB.66D8C740 Content-Type: image/gif; name="spacer.gif" Content-Transfer-Encoding: base64 Content-Location: http://www.consumerreports.org/content/Images/spacer.gif R0lGODlhAQABAID/AMDAwAAAACH5BAEAAAAALAAAAAABAAEAQAEBMgA7 ------=_NextPart_000_0003_01C4EACB.66D8C740 Content-Type: image/gif; name="0407ins001.gif" Content-Transfer-Encoding: base64 Content-Location: http://www.consumerreports.org/content/Categories/Money/Reports/Images/0407ins001.gif R0lGODlhlgBSALMAAFxjXo/e/cvR1WqhuZKeduaIG61SK/3gPf/WAq2vdtS9qInX9wAAAP///wAA AAAAACH5BAAAAAAALAAAAACWAFIAAAT/sMlJq70YE8BV/mAojmRpntmmKAngoXAsz3QouCsLYIKQ 97WgcBi75Va7ynG5Ijqf0Ikx16L4mExBdMuVAQi5rxRLXmm76HTmhlMAzuW44qyu19vvxpWsItPt gFtfSFpybm1Lf4GLRGxiDYYKfUyMlU9AEpGHWZadVgEBCwugiiN7ch1Lnp4CoaKvrwElp3GpR6Wr dQqusL2isjaakmCUuYsAo77KwB+0cQTER2DGgci8yr3MFs610TnQ1IDW2OS40HIbHIjfCeF247Cg sde/iueoAAlkyO53ybELADAYCC8bBTeG7jHhEEpbvygFQw2cOPCfrwBn1mGZtCLdAFgP/7tEFEiR IL1sAQZ466gPiTcOH6/RwRVyBryUJSkOOBlvgMZ06pZYoycv1raaMG4OyDlxJ7lRtpZAa3kE2dN4 Eq5hRFpCKdOBTrGl1IjO6tVfPEdxHXFzwVcGV8cK0xH2bNy1ISIuzQkg7S+fc1vUtfsUL4iCUEv2 jQt47ga/hI0axoB4lE+YkGENEtYisl2HkyVUHgWq6Fm5nM16vkpzbWV5A3Zm/hU1oerVT7eCGEag tTiLyUgyADB4WcC5borjJkeKsoHnBpJUaKU7TWWmynuSJdPi9vLIpHoAeE4gwXPqfqtDtBhAeEnG 2zeO/g5+wPMkBAxkv+ibRtu3+72yWf8kj9GHGyg+QddDfosRBpoQXn0VoGX5aNJZPK6YZiBACULn wXgNOghFhNhlNtZKZag2ljofbagZdDBy8NyEywjQ2xAk5jThilQ9Y9ZY0HHg4l/qjAfdQAYwQONF RhIA4T84SZjZgBsRs0FY7cEoyZC+uEdRiA4aGV0QOZYUYCjrJNBjkUrBaIAkLXKZWImrtZfffTWU qdOUa36RwJUZZtihhwTIGcteOQH32RcwOmkTlIjqSJR23xDH4qRialmooX9JuhyjHvoH6VtM3bYi ZgD1MqibG3B6KEnEzXZRQG6+4MWopEpaVCixyaNhp2666Z2LvjZU2neZvimqoLmWGuf/arFF+p6c sEVrbUyyxuKlo7cy2+xElhLEJpvKIfgWtQv4VMC6CCCwbgHRxQSel9LFoCe412IrLVOK/uJWqVyO VUC7BBfcbgHzLUPvsp1KWdqxlpEKZjZegpUtc+kaYPDGBcf6mbT1JoUrnWJtSC+xAQ3M8coIeHya eyGjcK/FcT388GnpstivZ2iqzPLKLp/l00Dc2juyp66idbOBPf9ssM/txvrrRaX1J8LMSl5c52VB H4imwQZAvXF0Blsqm9L+vjKA1XkdbabW9Wkc9ZLG+VQ2AD6rqbeaG5Snt3DExabqZWHbarS3JBs6 VtlwmztQAX8CNe7kbCpGOdQHMByx/5SupiQ2ccvwYlpslqszVXcI471uAoQH3hRM0XKwceaPIo40 pwBsvG6MsP8TW+X4knaAu8+9C6+b78b7+4yxc0x7tw0nbmjuTh9M0O+wf9Th8UVCZ/z34MOY/H1i t/v84dHfLucA5a+cpLgwARU2+PTXb3/47SNwvsi2v+0q+9WL2vW4Nr/7GfCA33sOy/YnM7ftiVPt AdoGwhY1zMBmPAjMoAEVuMA19AATlHFgU+DGGLk9zSmXQZhPsISgAmrwhbsz4coYqIfJGY4CWKNb fdpXAKfIA3QwgVLKYEhEGSJMbAy8gd/01rcL5JCEV6Ge7upSFK7FyT5EhCEF2wWd2f9ZABpgDGML SvFEdBFgZT3kCa9YlKzoeC+L+CNY8WRovumE8Y7Q+MIfyhgwAHIsjVfhGotaFDsXujCDWyQevMq3 PxvhEY+PaAAfueTHKUKGF9jLnigGFcMYii+B4ylY2KLDSDs+8o4tcNQkhyRFSzpok5lkU3kIdjwj zi86wlGZG2XnxYOcEo9VkKQIaUZJOhYMkOC5RuwoxwFUTjBcExlY95xnhV8CU4+IqVhFqFVJVxKL fXy7IzPVYbnfte98vLGmOIMWJcVAUSyt9OaGAnDGALbMWgEZIG1mSAF1PpJvQykNyGz2zr/UE406 PMtBq5fGpZEmOPycACSL9Mvu5Av/cPl61oG6KU/6oOmQ9tPPJTlKsPMBM5xf+Gcz96amI7D0QvTB 28+Q6aJo4cumTdEoNkhaxwlETqXqdMEHh0rUDw7rlfHsKNPa2ZfSCOehGEtqSav5Sz+dsjtFzap4 DGSf6ul0Q4h6lnC+6otVda9okKhqM/+5Aa1mNR8vjatcZTpTuMr1rngVzhJbAC687i2M7imPBX76 yLVCsjduJeo4/aomZn5pr4yNrF7/2tfIUnYi06gAYZ2Z0sMmlqjpBCxkLZuAkpD2tJNlYmVPSwCK ZFYK1jRsYefw2c+e7rRqMi1uJUuQl5JktIxtLWZvGFowdseaqaytbYEbWd3uNrjMS70ta117Q0de s7PWVG5ipXta5z73u+AVLtGq68/Y0la7WeUuaQEH3vZ+V7wMeO0EimvcikpunPjNr+l6pAMO8Bc5 AA6wNIqkDwpEAAA7 ------=_NextPart_000_0003_01C4EACB.66D8C740-- 4:33:26 PM