Lifestyle

6 Insurance Add-Ons Experts Say Are Almost Never Worth the Premium

By Mike Harper · August 14, 2026

Your insurance agent offered the upgrade. It sounded responsible. It was $12 a month. You said yes. You’re now paying $144 a year for something you’ll almost certainly never use.

Insurance companies generate significant revenue from add-on products — riders, endorsements, and supplemental policies that sound valuable in the sales pitch but rarely justify their cost in practice. Here’s what independent financial advisors say you can probably cut.

Accidental death and dismemberment insurance. AD&D pays only if you die in an accident — not from illness, not from natural causes. The odds of collecting on an AD&D policy are extremely low because most deaths are from disease, not accidents. A standard life insurance policy pays regardless of how you die and costs only marginally more. AD&D exists because it’s cheap to sell and almost never pays out.

Rental car collision damage waivers at the counter. The collision damage waiver offered by Hertz, Enterprise, and every other rental company typically costs $15 to $35 per day. Most personal auto insurance policies already cover rental cars. Many credit cards — particularly those from Chase, Capital One, and American Express — include rental car collision coverage as a cardholder benefit. Paying $200 for coverage you already have twice over is the most common insurance redundancy travelers make.

Credit life insurance on your mortgage. This policy pays off your mortgage if you die. It sounds protective — but it pays the lender, not your family. A standard term life insurance policy costs less, pays your beneficiaries directly, and gives them the flexibility to use the money however they need — including paying the mortgage, but also covering living expenses, education, or anything else. Credit life insurance is more expensive per dollar of coverage and less flexible in every way.

Identity theft insurance as a standalone product. Standalone identity theft protection plans charge $10 to $30 per month for monitoring and insurance. Most homeowner’s and renter’s insurance policies already include identity theft coverage. Many credit cards include monitoring as a benefit. If you’re paying for three layers of identity protection, two of them are redundant.

Cancer-only or disease-specific insurance. Policies that pay only if you’re diagnosed with a specific disease — cancer, heart attack, stroke — are marketed as supplemental protection but cover a narrow range of conditions at a premium that rarely justifies the payout. Comprehensive health insurance covers treatment for all conditions. A critical illness rider on a life insurance policy, if you want supplemental coverage, is typically broader and cheaper than a standalone disease-specific policy.

Mortgage payment protection insurance. This policy covers your mortgage payment if you lose your job or become disabled. The premiums are high relative to the coverage period (typically 12 to 24 months), and the exclusions are extensive — pre-existing conditions, voluntary job changes, and self-employment are frequently excluded. Building a six-month emergency fund provides the same protection without the premium, the exclusions, or the fine print.

Insurance is about transferring catastrophic risk you can’t afford to absorb. Add-ons transfer manageable risk at a premium designed to profit the insurer, not protect you.