Buying insurance to protect you from big problems is often a wise move. That being said, there are a lot of policies out there that really don’t offer you much in the end.

Most people view insurance incorrectly. It is simple a way to leverage your finances against the big, unfortunate things that can happen in life. A traditional example is if you are the bread winner in the family and are fatally injured. Life insurance is designed to leverage the risk of his happening by paying out a significant sum to make sure your family has sufficient finances to carry on and do not end up out on the street. While life insurance makes sense if you have a family, there are other types of insurance you are better off avoiding in most situations.

To the surprise of many, dental insurance is a very disappointing subject matter. If your employer offers it, take it! If they don’t, buying a policy for yourself or your family should be done very carefully? Why? The policies often only cover a small range of dental services. For instance, they dental policy may cover one session with the dentist for teeth cleaning each year. More importantly, the policy may not cover more serious and expensive dental needs such as root canals. Read the proposed dental policy very carefully before buying!

The extended warranty insurance plan is another financial killer. The first thing to consider is you are buying this for something that is brand new! Doesn’t the manufacturer have any faith in its product? Regardless, these warranties are usually a waste of your money. By law, most products have to work for a certain amount of time or the manufacturer has to take them back. Even if this time period expires, it usually costs less to just have the item repaired. After all, when was the last time your microwave stopped working?

Credit card debt insurance policies are the ultimate way to waste your money. These little beasts are designed to pay off your credit card debt when you die. Well, do you really care what happens to your credit card debt when you die?! Probably not. If you are concerned about your spouse getting stuck with it, then you should buy a traditional life insurance policy that is going to pay out much more money for each buck you pay in. Do not buy credit card debt insurance.

As you can imagine, there are a zillion different types of insurance being sold out there. In general, try to stick to buying insurance for the big things, and avoid doing so for the small stuff.

Barry Waxler is a San Diego financial planner who can be reached at http://www.UFCAmerica.com