5 Insurance Plans You Should Avoid in 2022?

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Friends, we all should buy the insurance and we all know this, Especially life insurance, health insurance, and motor insurance is already compulsory, But apart from these 3 important insurance plans, many other insurance plans are sold unnecessarily to us but we can avoid those

Why pay the premium unnecessarily

So in this post, we are going to talk about such 5 insurance plans you should avoid, With that, we’ll discuss life insurance and we’ll see what are the cases in which we can avoid life insurance also.

The post is going to be interesting, stay tuned!

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1st one

The 1st insurance we should avoid is Home Loan Insurance. See, when people buy a house, many people borrow a home loan for it

And people don’t pay attention there when we receive the loan sanction letter, an insurance premium is also added to that and generally, and we don’t pay attention to that component

And this component is added to your EMI So, in a way, you’re getting the premium of this insurance in a loan form so you are paying interest on that

So according to me, there is no such benefit of this insurance and we can definitely avoid this one

Let me tell you why. See, why we are buying or bank is selling the home loan insurance?

The main objective of the bank is if it happens in a case when the person who took home loan dies then they can do the recovery easily

On the other hand, the objective of the borrower is not to put the liabilities on his family So the purpose of both is getting solved but we are getting this insurance expensive. Our purpose can also be solved with term insurance. See, in case of all the eventualities if someone’s life is at risk and that person dies due to some reason

Then you get all these covers in term insurance

Term insurance is already the cheapest insurance and maybe that’s why the sellers sell it less

So we have to see our own benefit and our benefit is to increase the term insurance. That means whenever we’re buying a home loan or increasing our liability or borrowing any type of loan

The portion which is getting increased in our liability, we can increase the same portion in our term cover.

That means, either we can buy an extra term policy or we can increase the cover of our existing term insurance.

2nd One

The second type of insurance we should avoid is Flight insurance. Whenever we travel by air, you might have noticed an insurance premium is automatically added

But you can also uncheck that box

According to me, there is no such benefit from that insurance as well because it is covering such an eventuality that if there occurs any accident during the flight or any mishap happens in which loss of life is there. It is covering such events these events are also covered in term insurance.

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3rd One

The third is Child Insurance Plan. Many people sell these child insurance plans. That means if you have kids, then you can secure their education in the future.

Such plans are there in the market or insurance against a child’s life is also sold

But firstly, we should understand the purpose of the insurance. Firstly, our children are not earning right now. Ultimately, the insurance covers the events such as loss of earnings. So that the family of that person doesn’t suffer

But since our children are not earning now, there is no need for life insurance Otherwise, you’ll pay the premium unnecessarily then there are education plans about which we already discussed and all these things are already covered in term insurance.

So we need to buy a comprehensive term insurance plan instead of Child Insurance Plan.

4th One

The 4th insurance that we can avoid is the Credit Card Insurance plan. Many people are unable to do credit card payments.

So for that, credit card companies sell insurance plans. That means if you are not able to pay credit card bill due to any reason like unemployment can be a reason, Disability or accident can be reasons

As we discussed before, all these things are already covered in term insurance. Secondly, instead of buying an insurance plan for credit cards and increasing the spending on a credit card, it’s better to maintain financial discipline and buy less using a credit card.

And for events such as unemployment, any disease for some time you can make an emergency fund which we discussed multiple times. In that, keep a reserve of your 6 monthly incomes as an emergency fund.

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5th One

The 5th insurance we can avoid is Disease Insurance Many different types of plans are now available in the market. Some say to buy the cancer-specific insurance plan

If in the future, you suffer from cancer then this insurance can cover such an event there are many heart-specific plans

Many covid specific plans are there in the last 2 years. But according to me, there is no benefit of such insurance plans because we don’t know from what type of disease we will suffer in future

So it’s better to buy a comprehensive health insurance plan which covers maximum diseases and pre-existing diseases.

What is the purpose of life insurance?

If anyone dies, then the family need not suffer which means we want to replace the earnings of that person. But if the family income is already good then maybe life insurance is not required.

And in which cases can this happen?

If your spouse is already earning well then they don’t need an insurance plan or if you have some income-generating assets like many people have an extra rental income. So they might don’t need many people to have good savings, good interest incomes

So in cases where income-generating assets are there or monthly income is good. In such cases, life insurance is not needed

And when does this happen?

It generally happens in your 40’s or 50’s when you build sufficient assets so the requirement for life insurance decreases because your children also grow old and they also become independent But insurance is a must for the people who are just starting their career and are in the ’20s or ’30s because liabilities can increase in the coming time

So when we buy insurance, we should buy it as soon as possible because the premium is less. So broadly speaking, as we discussed earlier

We need only 3 main insurance policies

  1. Life insurance in which we should buy a term insurance
  2. Health insurance, in which we should buy a comprehensive insurance after research
  3. Car insurance which is already compulsory


So we discussed 5 Insurance insurance mistakes to avoid. I hope you learned something new if you liked this article then do like and share it with your friends and family members

They might also have doubts related to insurance and if you have questions related to this post or website then you can ask in the comments section.

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