Buying insurance (extended warranty or guarantee) on everyday goods / appliances?
"Generally, a polite decline. However, I have dealt with sales people who take first refusal as a ""test"" response, and decide to go into the details anyway. The longer they talk the more robust my responses. See this Telegraph article that discusses why their experts think it's a ripoff, and why you should check your credit cards and home insurance policies as they may already have you covered (possibly UK/Europe only). http://www.telegraph.co.uk/finance/personalfinance/2820644/Extended-warranties-In-our-view-its-a-rip-off.html On a different note, see this list of questions to ask if you are considering going with the extended warranty. The source doesn't rule for or against the idea, leaving it at caveat emptor: http://www.choice.com.au/reviews-and-tests/technology/home-entertainment/accessories/extended-warranties/page/questions%20to%20ask.aspx" "IMO it's usually not worth it and here's why. There's a statistical distribution of how likely a unit may fail depending on its age. Probability is high for a short period after the unit comes into use because there are parts that were not thoroughly tested and manufacturing defects. Then all those defective parts fail and get replaces and the unit likely functions without faults for years. Then it reaches it lifetime end and again probability becomes much higher - parts wear out and start failing one by one. Every unit comes with a manufacturer warranty of one to two years already and that warranty will likely cover any defect causes by materials and manufacturing defects - the period when fault probability is initially high. ""Extended warranty"" only covers the unit for two-to-five years and most units have lifetime of about ten years. This means that the ""extended warranty"" is in effect when it is least useful." On most of the consumer electronics it would not make much sense to get Insurance. Mostly these are not priced right [are typically priced higher]. IE there is no study to arrive at equivalent claim rates as in motor vehicle. Further on most of the items there is adequate manufacturing warranty to take care of initial defects. And on most it would make sense to buy a newer model as in todays world consumer electronics are not only getting cheaper by the day, but are also have more function & features. I politely decline. Insurance is there to protect me against catastrophic financial loss (huge medical bills, owing a mortgage on a house that burned down, etc.) not a way to game the system and pay for routine expenses or repairs. "I decline politely.   The cost of the insurance policy has two components: The actual cost of a likely repair + profit. If I set aside the cost of a likely repair myself, then I get to keep the profit.   If the item doesn't break, I get to keep the ""repair"" money too :)" "Most of the consumer products that you buy at retail these days are commodity priced, and have been for a long time. Margins are thin, so if there are retail salespeople milling about, their compensation isn't coming from the TV or computer with a 6% gross margin. It comes from the extended warranty programs (which are not insurance and do not have regulated underwriting standards), which are typically sold at a 65-95% gross margin. So that $200 warranty most likely costs the retailer $50. The salesman gets $15-25. I paid for my college education working at a CompUSA selling these things, along with other high margin items that paid commission. In most cases, you aren't getting much coverage anyway. Most products carry a 1 year warranty, and using most ""gold"" or ""platinum"" credit cards doubles a manufacturer's warranty by up to 1 year. So with most transactions, you are already walking away with a 2 year warranty.  Warranties or service plans make sense for durable goods that cost alot and are expected to last a long time and/or require regular maintenance. I think they especially make sense if your budget is really tight -- a fixed maintenance cost can be an asset to some people because they can plan around it. Examples of this include: service plans for a furnace, boiler or water heater or a car if you're buying a manufacturer-endorsed service/maintenance plan from a dealer." "I usually say ""no thank you"", but if the salesperson gets pushy I say ""if I need insurance, I guess I won't buy the product because I only want to buy quality that will last a good long while"" I have never actually walked away from a purchase because I generally research these things ahead of time, but I think I mean it when I say it." One important issue that has yet to be covered is the cost (to you) in terms of paperwork, lost time, and phone calls that you have to make to claim the insurance.  Such insurance claims often are very low priority on their customer service queues (for obvious reasons, since they have already made the sale). Therefore, you might have to spend up to a few hours of your time calling or writing emails to claim the warranty, which may often not be much (  Therefore, many people end up not claiming the warranty during the hassle. Much like non-scam mail-in rebates, more often than not you would either forget to or decide it is not worth your time to claim the warranty. Before buying such policies, other than the obvious cost-benefit calculations, you should also take this additional factor into account.   Therefore, many people end up not claiming the warranty during the hassle. Much like non-scam mail-in rebates, more often than not you would either forget to or decide it is not worth your time to claim the warranty. Before buying such policies, other than the obvious cost-benefit calculations, you should also take this additional factor into account.
Best is indeed subjective. You could for example, get a Universal Life Policy that pays a guaranteed interest on all monies (even those in excess of what you need to pay to cover the policy). Most people will tell you (probably correctly) that using life insurance as an investment vehicle is a bad idea, however.  The growth of the money in a UL policy, however, is usually tax deductible and grows at a guaranteed rate. NWML here in the U.S. pays a guaranteed (unless they go broke I suppose) 4% per year; historically, however, they've been paying 6% per year. That's pretty good, except a lot of your money goes into buying the policy the first few years. Whirlpool has absorbed a number of its erstwhile competitors over the years. Maytag, KitchenAid, Magic Chef, Jenn-Air, and Amana are all made by Whirlpool now. Frigidaire and GE are the two remaining major American makers of major household appliances (Hotpoint is GE) and Frigidaire is actually owned by Electrolux now.  It's my understanding that Sears has been switching over to LG for some of its Kenmore appliances. Their flagship front-load washers and dryers sport features nigh-identical to top-end LG models. This relationship, by the way, may be largely responsible for the increased availability of LG parts and service in the US recently (spotty availability of parts used to be a hazard of buying LG).  We had two service calls on our Whirlpool Cabrio top-load washer while it was still under warranty. The repair guy told us they are generally reliable in his experience, however, and that ours was something of an anomaly. After replacing the main motor and the controller board, we have what is basically a brand new appliance internally. It is still occasionally flaky (every few months it forgets how to spin the drum) but I figured out an easy workaround that has worked so far. My advice, though, is to definitely buy the extended warranty. Bingo.   The problem is most people associate the warranty as “warranty vs. total replacement” ($300 now vs. $3,500 later) instead of “warranty vs. repair” ($300 now vs. potentially $300 later). The fun part is when they still charge you.   Edit: Your grandma has had the same appliances for 15+ years without needing any repairs. When a car company offering an extended warranty shows up on my front page 4 times I think it's safe to say we're beyond circlejerk and into ultrajerk. People don't even read the part about the warranty only covering 8 years, they just read the infinite mileage claim and start gagging on Techno Jesus' balls. Reddit's obsession with Tesla is beyond cringeworthy. The answer to this question is very different depending on the type of item.  From a purely financial perspective you would want to answer these questions which you may not have enough information to answer: Realistically the question I prefer to ask are: When something fails there is a big difference to me between having the cash and having an insurance policy that is suppose to cover it even if they are theoretically the same value.  Some insurance policies may even be better than cash, like homeowners insurance might help take care of details like finding a contractor to fix the issue, finding temporary housing if your house burns down, etc. Here's a good rule of thumb. In any situation where you are required to purchase insurance (Auto Liability, Property Mortgage Insurance, etc.) you can safely assume that you aren't the primary beneficiary. You are being required to buy that insurance to protect someone else's investment. We frequently get whole insurance vs term insurance questions; and most of the answers will support term insurance.  We get questions regarding getting insurance before there is a need in case there is a problem getting it later. And for most people it doesn't make sense to over-insure early. You have asked from a slightly different position, you have a more solid reason to be concerned about your health. You don't have a need now, and can't estimate what your need will be, or when it will be. Those numbers you quote may seem high, but when you don't know how many kids you may have, or what you will need to protect against, they may turn out to be inadequate when you do need the insurance. You need to sit down with a fee only financial planner. They can lay out your options today, and as your situation changes.  Then as the years go by, have that plan reexamined. The fee only planner will not tell you what company to buy insurance from, or what funds to invest in, but they will help you decide what types of protection and investment you need. Best Buy places heavy emphasis on it's employees to sell Extended Warranty/Protection Plans. It is extremely annoying when they try to sell you a warranty on a $10 alarm clock - more so when the warranty cost more than the product. I avoid Best Buy as much as possible just because I don't wan't to hear the warranty pitch anymore.