KNOXVILLE, Tenn. (WATE) -- Many insurance policies help protect against events that could send your finances into a death spiral. However, there are insurance products or policies that are rarely worth paying for.
Identity theft insurance
Identity theft insurance is one of those policies that's a waste of money.
The federal law limits your liability from credit card fraud. So, even if a thief uses your credit card, you're off the hook if you report theft promptly.
The Federal Trade Commission your liability for unauthorized use of your credit card is limited to $50. If you report the loss to the credit card company before your credit card is used, you are not responsible for any unauthorized use.
In 2014, only 14 percent of identity theft victims paid one dollars or more out-of-pocket, according to a Department of Justice.
An alternative way to protect yourself before you're hit is to monitor your bank and credit accounts regularly. Remember you get three, free annual credit reports. If you think your identity has been compromised, place a 90-day fraud alert on your credit file.
Credit life insurance
When you obtain a car loan or a mortgage, you may be offered credit life insurance.
It pays all or part of your loan balance if you die. The beneficiary is your lender, not your family.
Occasionally, it is built into the loan and can't be declined. Most often, though, it is a separate and optional purchase.
The Federal Trad Commission says beware of lenders slipping it into a purchase without asking. That's illegal.
Private dental insurance plans
If you have dental insurance through work, you are golden. Usually the plans are relatively inexpensive and save over the long run.
Otherwise, private insurance dental plans can run $50 a month or more for benefits that top out at as little as $1,000 a year. Don't buy dental insurance thinking you'll collect thousands of dollars' worth of implants or other complex treatments.
Your policy might just pay 50 percent for oral surgery and restorative care and it may not cover cosmetic dentistry at all.
Life insurance for kids
Adults buy life insurance coverage for themselves to provide for their families in case they die. But life insurance for kids?
Well, arguments in favor of taking out life insurance for children include locking-in insurance for them at a young age in case it becomes impossible or too expensive to insure them later because of illness. Some advocate coverage for possible funeral expenses, but unless the family depends on the child's income, there's no need to insure his or her life.
Rental car coverage
If you have full insurance coverage on a car of your own, you probably don't need rental car coverage, no matter what the lady or guy behind the rental car counter says. Go ahead and waive it.
Make certain, though, you are covered under your own auto policy. Your credit card also may have coverage if you pay for the rental with the card.