There are undoubtedly some types of insurance that everyone absolutely should have. Car insurance, health insurance and homeowner's insurance (if you own a home) are easily in the top three.

Insurance is big business and new products and policies are routinely created to meet all sorts of needs. Some may obviously be a wrong fit, while others might sound like a good idea. Short of working with a fee-based financial planner, how do you determine what insurance you and your family should have?

I recommend starting with the types of insurance policies you need to make sure you're covering the most important bases. Once those policies are in place, you can branch out and consider other insurance types that might be important to your unique situation (like key man insurance for business owners or long-term care policies to offset the rising costs elderly care). And of course, you can determine which insurance policies don't belong in your financial plan.
3 Insurance Policies That You Don't Need

While there are certainly more than a few types of insurance policies that have their place in people's portfolios, there are just as many that you're probably better off without. While they may sound appealing in theory, in reality, you may be wasting money on the premiums. The following insurance types fall into the category of coverage types most people don't need.

1. Mortgage Life Insurance

This type of insurance is receiving more media coverage lately, but it's probably a policy you can do without.

Mortgage life insurance is a policy that promises to pay your mortgage payment in the event you become disabled or die. If you're married this sounds like a pretty good idea, right?

Well, not exactly. This type of policy really only overlaps with your existing insurance policies that you hopefully you already have through your employer or through a separate policy (remember the list of insurance everyone should have?).

In the event of death with a standard life insurance policy, the beneficiary of the policy receives the benefit that can be used for any expense they choose, including paying off your shared mortgage.

It's typical for financial planners to recommend that a life insurance policy be taken out for an amount that not only covers the lost income of the deceased, but some additional amount to cover other costs. Mortgage life insurance can be an expensive -- and unnecessary -- supplement to traditional life insurance. In the end, why pay an additional premium for something that a cost-effective life insurance policy can coverr?

What it comes down to is that mortgage life insurance is very narrow in its coverage and, therefore, probably not the best use of insurance premiums. You're generally better off sticking with a good life insurance policy. You can always increase your life insurance coverage to offset your mortgage balance if that's something you're especially concerned about.

2. Travel and Flight Insurance

Travel and flight insurance policies offer another type of coverage that may require you to pay a premium for insurance that could overlap with coverage or benefits you already have.

Before you spend money on travel insurance, check your current health and life policies to see how accidents or injuries during travel or flights are covered. More than likely there's some sort of coverage included. And in the event of a catastrophe, your life insurance policy should cover you if you pass away while traveling.

If you use a credit card to book tickets or travel arrangements, you'll also want to check with your credit card company to see if any travel protections are included with your account. Many credit card companies automatically provide benefits like car rental insurance, lost baggage insurance or travel accident insurance as part of your cardmember agreement. If you find that you still need some additional insurance to keep your mind at peace, you can always purchase a small travel policy to cover the gaps in your existing coverage.

3. Cancer Insurance/Disease Insurance

Critical illness coverage like cancer insurance is becoming more popular as cancer rates and awareness rise. But is it really a worthwhile investment? While cancer treatment can come with some astronomical medical bills, you might want to hold off on taking out a cancer-specific insurance policy.

The reason? In most cases, your primary health insurance policy covers medical expenses related to cancer treatment. If you're worried potentially expensive treatments, like cancer treatment, leaving you with out-of-pocket costs once you reach the lifetime coverage limit, review your current coverage to see how much the policy pays.

One shocking reason cancer insurance policies can be a waste of money is that most cancer insurance doesn’t even cover skin cancer, a leading type of cancer. Not only that, but cancer insurance typically doesn’t cover outpatient expenses related to the cancer treatment. And, there's always the possibility that you may not get cancer at all. In those scenariso, you have to question exactly what you're paying for with these types of policies. 

Unless your health insurance specifically does not cover cancer-related expenses or you have a high likelihood of getting a specific type of cancer that could be covered by a policy, you're more than likely wasting money on a premium you could be using elsewhere. And in some cases, your primary medical policy may not cover you if you have supplemental coverage elsewhere for the same types of treatment. As with any type of insurance, be sure you understand the benefits and limitations before buying a policy.