Stop Wasting Money: The Insurance Policies You Don’t Need

Insurance Isn’t About Covering Everything

The purpose of insurance isn’t to cover inconveniences; it’s to cover devastation. If an event could financially wipe you out, that’s where insurance belongs. If it’s just an inconvenience? That’s where many people are wasting money.

When it comes to insurance, most people don’t think about the opportunity cost of insurance. Every time you say yes to a policy, you’re saying no to putting those dollars somewhere else.

• You buy pet insurance? That $50 a month could have gone toward term life insurance, the kind that protects your spouse and kids.
• You tack on “extra convenience” coverages? That money could have funded retirement savings and protected you from outliving your income.

When you’re out of balance with your insurance, you may feel “covered,” but you’re really exposed where it matters most.

Devastation vs. Inconvenience

• Devastation is dying too soon and leaving your family with nothing.
• Devastation is losing your income and not being able to work.
• Devastation is outliving your retirement money.

Losing luggage? Inconvenience. Paying out-of-pocket for the dog’s stitches? Inconvenience. None of these will bankrupt you.

Here Are a Few Coverage Examples That Distract from Protecting What Matters Most

Pet Insurance - Pets are family. We love them, spoil them, and can’t imagine life without them. But from a financial perspective, pet insurance often doesn’t make sense. Most vet bills, while costly in the short term, won’t bankrupt you. Spending $40–$60 per month on a policy for Scrappy (the name of my childhood dog) can add up to thousands of dollars over time…dollars that could have gone toward protecting your children, spouse, or your own retirement future. A better choice? Build a small emergency fund for pet expenses and use your insurance dollars for life, health, or disability coverage.

Mortgage Life Insurance - The pitch sounds reassuring: “If you pass away, your mortgage will be paid off.” But here’s the problem: it’s too narrow. Mortgage life insurance only pays off your home. It doesn’t put food on the table, pay for your kids’ education, or keep the lights on. A well-designed term life policy can do all of that and more. With one policy, your loved ones have the flexibility to pay off the mortgage, cover monthly expenses, and handle whatever financial needs come their way. Why limit coverage to just one expense when life insurance can cover them all?

Unemployment Insurance - This type of coverage promises to make minimum payments on your bills if you lose your job. On the surface, it feels comforting. But the payments are often small, temporary, and limited by fine print. The smarter strategy is to create an emergency fund…3 to 6 months of living expenses put away in a savings account. That way, you’re in control of the money, not paying premiums year after year for something you may never use. And if you never lose your job? You still have your savings.

Disease-Specific Insurance - Cancer. Heart disease. Stroke. Insurance companies know these words strike fear and they design policies around them. But here’s the issue: they only cover one thing. If you develop a condition outside the list, you’re stuck. Instead, strong medical insurance will cover you regardless of the diagnosis. It doesn’t matter what label the doctor gives…it matters that the bill gets paid. Rather than trying to predict the unpredictable, invest in comprehensive health coverage that handles the big stuff across the board.

Accidental Death Insurance – Accidents happen, but statistically, they’re far less common than illness. Many accidental death policies come with strict stipulations…only certain accidents qualify, leaving families with false security. Worse, most of the scenarios they claim to cover (like car accidents or workplace injuries) are already covered by auto insurance, workers’ comp, or health insurance. Instead of buying a narrow, loophole-ridden policy, a solid life insurance plan will protect your family whether death comes by accident or illness. It’s broader, cleaner, and actually pays out when it matters.

Balance Is Everything

Insurance isn’t about buying every policy. It’s about making sure the big ones are covered first:

• Car Insurance – Required by law.
• Home Insurance – Required if you have a mortgage. (If your home is paid off, it’s still worth a serious conversation.)
• Life Insurance – Protects your family if you’re gone too soon.
• Health Insurance – Shields you from medical bankruptcy.
• Disability Insurance – Replaces your income if you can’t work.
• Retirement Security – Ensures you don’t outlive your money.

Once those foundations are in place, then consider the “extras”: roadside assistance, scheduled jewelry, identity theft, travel coverage, etc. These are nice-to-haves…but only after the big ones are covered.

Bottom line: Cover what the law and lenders require, then the events that could financially devastate you, and only after that, the extras. Never the other way around.

Final Thought

Insurance is a tool, not a trophy shelf. Don’t collect policies. Protect what matters most.