9 Types of Insurance You (Probably) Don’t Need

For most older adults, these policies have more cons than pros

Cameron Huddleston,

AARP

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Published November 11, 2025

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AARP (Getty Images,3)

Many older adults have the insurance coverage they need to protect their finances from the high cost of a car accident, sudden illness or property damage to their home. But is it possible to have too much insurance?

The answer is yes. Although insurance can provide a safety net when bad things happen, you don’t need a policy to cover every possible risk, especially as you get older. “Sometimes people have policies they no longer need, no matter what type of coverage it is,” says Tony Steuer, author of Insurance Made Easy and an insurance underwriter in Alameda, California.

However, before terminating a policy, consult your insurance agent, accountant or financial planner, suggests Erin Ardleigh, founder of insurance brokerage Dynama Insurance in New York. “You don’t want to cancel a policy and regret it,” she says. “You want to be really sure you don’t need it.”

Here are nine types of insurance most older adults can do without.

1. Accidental death and dismemberment insurance

This type of insurance is usually provided as a workplace benefit through employers or as an additional layer of coverage on a life insurance policy, Steuer says. It’s less expensive than standard life insurance — policies usually cost $7 to $10 a month for $100,000 of coverage, according to online insurance marketplace Policygenius — but only covers deaths and permanent injuries from certain types of accidents.

“There’s a reason it’s so cheap,” Steuer says. “[Providers] are pretty sure they’re not going to have to pay out on it.”

He says most people are better off getting a standard life insurance policy that covers any type of death and a separate disability insurance policy that covers lost income due to injuries, illnesses or chronic conditions that could sideline them from work.

2. Burial insurance

Also called final expense insurance, this type of life insurance is designed to cover funeral and burial costs. It’s typically marketed to adults ages 50 to 85 and doesn’t require a medical exam, making it easier to qualify for than other types of life insurance. However, Steuer says many burial insurance policies have relatively high premiums and low payouts.

For example, a 70-year-old man would pay $70 a month, on average, and a 70-year-old woman would pay $53 a month — $840 and $636 a year, respectively — for a burial policy with a $10,000 benefit, according to Reno, Nevada–based insurance agency Choice Mutual.

Instead of buying burial insurance, Steuer recommends either purchasing a life insurance policy that covers your funeral and burial costs or setting aside funds in a savings account that your survivors can access when you die.

3. Credit insurance

When signing up for a new credit card, you may be offered insurance coverage that would pay off the balance if you owe money at the time of your death or in case of a disability or job loss. But the premiums are often tied to the amount of debt you have (the higher the balance, the higher the premium), making credit insurance an expensive way to cover your debts.

If you’re on top of your credit card bills, this is costly coverage you don’t need, says Michael Hardy, a certified financial planner and founder of Ocean Wealth Group in Williamsville, New York. “That’s a bad deal,” he says.

If you are carrying a balance on your credit card, consider putting the amount that you’re spending on credit insurance toward paying off the debt now.

4. Collision insurance on an older car

Collision insurance helps cover the cost of repairs if your vehicle is damaged in an accident, but it might not be worth keeping if you have an older car that has significantly dropped in value since you purchased it.

“If the annual premium for the collision insurance is equal to or exceeds 10 percent of your car’s cash value, you should consider terminating it,” Steuer says. For example, if your premium is $400 a year for a policy with a $1,000 deductible and your car is worth only $2,000, collision insurance may not make financial sense, since the most you would net if you totaled your vehicle would be $600.

5. Disability insurance if you’re retired or nearing retirement

Disability insurance can help replace your income if you’re unable to work because of an injury, illness or medical condition, making it a valuable type of coverage for many working adults. According to New York–based insurance company Guardian, 43 percent of working Americans have it.

But Ardleigh says you generally don’t need disability insurance when you’re retired, or if you’re approaching retirement and have enough in savings to replace your income if you become disabled. A policy typically costs 1 to 3 percent of your salary, according to Life Happens, a nonprofit focused on insurance education. If your pre-retirement income was $50,000, canceling a policy you no longer need could save you up to $1,500 per year.

6. Life insurance

Life insurance can help support your loved ones by replacing your income after you die. Some policies, such as whole life insurance, also serve as an investment by accruing cash value over time.

But if your children are grown and you have retirement savings or other assets that can support your spouse, the money you’re spending on life insurance might be put to better use, especially if you have a cash-value policy, Ardleigh says. Premiums for a $500,000 policy you bought in your 30s could be $5,000 or more a year.

If you have a whole life policy that you no longer need, consider canceling it to receive the cash now. You can put the money toward important financial goals such as paying off credit card debt. Another option, Ardleigh says, is to use a 1035 exchange to convert your whole life policy into hybrid life insurance, which would provide a long-term care benefit in addition to a death benefit. This exchange is named after a section of the federal tax code that allows for the tax-free transfer of funds from one type of insurance policy or annuity contract to another.

7. Trip cancellation insurance for domestic flights

When you book a flight, chances are you’ll be asked whether you want to spend more for insurance coverage in case of cancellations. This type of insurance typically costs 2 to 9 percent of the total ticket cost, according to a NerdWallet analysis. Hardy, who describes himself as a frequent flier, says trip cancellation insurance usually isn’t worth it for travel within the U.S. for a couple of reasons.

First, many trip cancellation policies have exclusions that can result in denied claims, such as failing to see a doctor before canceling a trip if you’re sick. Second, many airlines are offering more flexible rebooking policies that extend refunds or credits if you have to cancel a flight, making trip cancellation insurance more or less moot, Hardy says. Also, some travel credit cards provide trip cancellation protection.

That said, Hardy recommends purchasing a travel insurance policy that covers cancellation for international trips, which often have higher prepaid expenses.

8. Mortgage protection insurance

Mortgage protection insurance, also called mortgage life insurance, pays off what’s left on your home loan when you die. Premiums vary based on multiple factors, including the value of your home and your age when you buy the policy. A mortgage protection plan with $300,000 in coverage purchased by a 50-year-old man costs on average around $30 a month, or $360 a year, according to an analysis by independent insurance agency Seniors Mutual in Austin, Texas.

Steuer says life insurance is usually a better deal. Beneficiaries can use death benefits from a life insurance policy however they choose, while mortgage protection insurance payouts can only be used to pay off a mortgage balance.

Another drawback: The value of a mortgage protection policy declines over time as you pay off the loan, but the premium remains the same. Steuer says that’s a raw deal: “In 10 years, you’re still paying that level premium, but the coverage has decreased.”

9. Rental car insurance for trips in the U.S.

Chances are, if you’ve ever rented a vehicle, you’ve heard a sales pitch for insurance from a rental car agent. They’re usually selling a collision damage waiver, which protects you from liability for damage to the vehicle but typically adds $10 to $40 a day to the cost, according to Insurify, an insurance comparison site.

The next time a rental car agent asks, you can probably say no. “Most of the time, especially domestically, the car insurance you have will cover any liability you have in the rental car,” Hardy says. “On top of it, most credit card companies also cover you domestically.”

Still, it’s worth verifying with your insurance agent or credit card issuer that you’re sufficiently covered before renting a car.

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Cameron Huddleston is an award-winning personal finance journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. Her work has appeared in Kiplinger.com, Kiplinger's Personal Finance, Forbes Advisor, Chicago Tribune, Business Insider and many more online and print publications.