In Chapter 9 we look at health insurance, and in Chapter 10 we look at property and liability insurance – in both chapters we look at not only what you need, but what you don’t need.  But there are some types of insurance policies that we don’t even mention. Did you know that you could get an insurance policy to cover just about anything?  In
fact, after Proctor & Gamble signed the Pittsburgh Steelers’ star strong safety Troy Polamalu to do commercials for Head & Shoulders shampoo, Proctor & Gamble took out a $1 million insurance policy that would pay off if Troy lost more than 60% of his hair in an accident.  That’s not the only weird insurance policy out there – America Ferrera, the actress who played Ugly Betty had her smile insured for $10 million by Aquafresh, while Mariah Carey had her legs insured for a reported $1 billion (that’s right, $1,000,000,000) by Gillette.

You might think that because you aren’t a celebrity there isn’t an unusual insurance policy that you can buy, or that someone might try to sell you – you’re wrong.  A recent Wall Street Journal article, “Don’t Buy Too Much Insurance!” looked at a number of new types of insurance policies that are being heavily marketed today.

They include:

• Juvenile Life Insurance
• Tuition-Protection Insurance
• Identity-Theft Insurance
• Payment-Protection Insurance
• Cancer and Critical-Illness Insurance
• Divorce Insurance

The article also looks at:

• Term Life Insurance
• Disability Insurance
• Umbrella Liability Coverage
• Earthquake and Flood Insurance

Do you have any of the above policies?  Buying insurance probably isn’t even on your radar yet, but someday, probably sooner than you think, it will be and knowing what you need and what you don’t need will prove to be quite important.  It just might save you money.

None of the policies listed in the first set of bulleted policies are recommended, while all of the policies in the second set are.  After reading the article be sure to check out the links to SmartMoney guides for all the recommended policies.  You can never know too much about the insurance policy you are thinking of buying.

Class Discussion

1.  Pick one of the types of policies that are not recommended, and read about it in The Wall Street Journal article.  Google the policy and then read about it on one of the websites that sells it.  Be prepared to discuss in class how insurance companies market these types of policies and whether or not you should or would consider buying one of these policies.