Insurance is a useful tool to cover risks, if applied wisely. If not, then it is the equivalent of throwing your money away. Even worse than throwing your money away, these frivolous insurance policies can leave you with a false sense of security.
Less useful policies tend to offer very narrow single-purpose coverage, overlap with existing insurance policies, or have virtually non-existent chances of occurring (such as the proverbial tidal wave insurance in Kansas). Here are five examples:
- Life Insurance For Children – From a payout standpoint, it does not make much sense to buy life insurance for your child. There are no dependents that require support or assets to protect for heirs.
The only reason to buy life insurance for a child would be a whole life policy that your child can take over when they come of age. Then, later in life, he or she will probably be able to pay the premiums out of the built-up cash value. Even so, t…