TODAY | April 21, 2014
>>> okay, so we've all been there. at the cash register , going to buy like a new tv. employee says hey, you want to buy the extended warranty ?
>> my heart starts to race. you go into a panic because you really don't know what you're supposed to do. is it worth it to pay the extra for that or travel insurance ?
>> here to help us figure it all out is farnush. good to see you.
>> i'm eating for two.
>> there you go. you should have two. let's launch into some of these. let's start with the extended warranty . you want to protect your purchase but you don't want to feel like the salesman is getting one over on you.
>> these have huge mark-ups. consumer reports have researched countless electronics and appliances. they say skip it because a lot of times you get the manufacturing's warranty for free, which is at least 12 months. if a product should break or malfunction, it will happen in the first year or so. so skip it.
>> what about tamron? you just booked a trip and you got trip insurance.
>> i'm taking my nephew, we're going to london. it's a big trip. i was torn about travel insurance .
>> you were smart to get it. i think increasingly, this is becoming more valuable as we know airlines are becoming less generous with refunding you in case of -- you want to change your ticket last minute. so trip insurance, travel insurance . there's various types. there's the basic which will cover you in the event you want to change your flight and get refunded. or there's comprehensive, which includes that plus some medical insurance , and only about half of american insurance plans will cover you internationally, so check your insurance plan if you're going abroad.
>> percentage-wise, how much should you expect to pay?
>> 4% to 8% of your trip. they also factor in your age, so those are some things to think about.
>> life insurance , it's a difficult one. i'm still not sure i understand the distinction. which way to go?
>> so first thing about life insurance is you definitely need it if someone is dependent on you for your income. most people are fine getting term, and it works just like it sounds. it lasts for a period of time. once you sign the policy, for say ten, 15, 20 years. if you pass away within that timeframe, then the policy kicks in and your beneficiaries can start getting payments. it's anywhere from 150 on up, depending on your age, your health. when you get it, the earlier, the cheapest. whole is very expensive. i think if you really want a good basic insurance policy , go with term. whole is a guaranteed benefit. it lasts you your entire lifetime and it has a savings component that you can borrow against so it has more flexibility. but get this. one in five people with a whole life insurance policy will cancel the policy within the first three years because they can't afford the premiums.
>> that's not good.
>> they're really expensive. it's like six to eight times more than term.
>> what about a home warranty ? how is that different from home insurance ?
>> home insurance is important if you want to protect your home against fire, burglary. a home warranty is something that's offered to new home buyers to cover things like an appliance breakdown, electrical, plumbing problems. smart if you're buying a brand-new, newly constructed home. and sometimes the builder will throw it in. or the seller will throw it in for free. so ask if you can get it for free.