That amount will be added to your bill, and then you will have to pay interest on the interest. Some types of insurance also can be avoided to save money, Wright said. For instance, credit card insurance makes sure that credit card companies will be notified if cards are lost or stolen. The insurer promises to help you avoid having huge bills run up on your account something that you do not have to worry about. If your family has adequate life and disability insurance, think carefully before buying credit life insurance.
Lenders often push credit life insurance, which pays off the debt in case of death or disability.
But it is usually more expensive than other insurance and it is not required. Life insurance for children is something many young parents are tempted to purchase. Often it is purchased with the idea of providing a college fund for the child. But the money would be better spent to increase the coverage for the parents, Wright said. Couples should insure themselves, if they want to use life insurance to fund their child's college expenses.