Confused by Insurance Options?

When it comes to insurance, there are so many options. You can insure just about anything these days. People often think that it's better to be safe than sorry, but sometimes end up spending more money than they should on coverage they don't really need. If you own a business, there are options for Business Insurance as well.

You should cover the big risks in your life. Those being your life, your health, your home and your car if you have one.

You can save money on insurance. Shopping around for the best deal is one good way. Companies also give discounts to customers who buy more than one type of coverage from them. Raising your deductible will lower your insurance monthly payment. You should make sure that you have coverage that's both comprehensive and covers catastrophic events that would cause hardship, such as the death of a spouse.

According to Robert Hunter, director of insurance for the Consumer Federation of America, there are common types of insurance that he and other experts believe people should avoid:

Life insurance for children- Losing a child, may be the hardest and toughest experience a parent can go through, but the experience does not lead to economic hardship. I would think you do not rely on your children to provide income for your survival.

Cancer insurance- This policy does cover one risk, but it is better to just have good insurance. Death comes in various ways...why pay for protection just for cancer?

Accidental death- Again, this is covering a risk, but having a good policy will be adequate. Unless, you are in a dangerous profession.

Travel insurance- This coverage would only be useful if you are aware of a serious illness or if you would not be able to reschedule.

Whole life insurance- Term insurance provides an investment option that might be a better choice. If you have a spouse working from home, make sure they are also covered due to their death causing a financial hardship.

Insurance against inconveniences- Are they really worth paying monthly for? Would it be the end of the world? Probably not...

Identity theft-Reguarly check your credit report, which can be done for free. Take precautionary steps to avoid someone being able to access your personal information.

Insuring your clunker- It doesn't make sense to have full insurance coverage on an old car unless of course it is a classic and worth a lot of money. If your old car gets totaled in an accident, you will only receive the value regardless. Would your monthly payments over the years exceed the value?

Extended warranties- Quality purchases should not fail while under warranty

Payment protection insurance- You pay a lot of money each month for this protection. This coverage pays your credit card or mortgage payments in case of illness or job loss, but what you have already and will continue to pay be more than having made sure you had just saved enough for a 'rainy day'?

If you own one of the above policies, you may want to reconsider. Is this policy truly necessary in protecting you from a financial hardship? If it isn't, why throw your hard earned money toward a monthly expense?