Single-issue insurance policies are considered a rip-off by some consumer advocates. Clark also agrees that you should avoid them. Examples of single-issue policies include mortgage life insurance, cancer insurance and accident insurance.

In the case of cancer insurance, insurers use the power of the C-word to sell the policy. Years ago, people wouldn't even utter the word "cancer." They would just say that you had a malignant tumor, because a diagnosis was often considered fatal. But today, many people survive cancer. Insurers, however, have learned that they can still capitalize on people's fear of the disease.

Accident policies are a tremendous rip-off. The reality is that general insurance -- of the life, disability and/or health variety -- represents a better choice.

Mortgage life insurance, meanwhile, is also garbage. The premiums are about 10 times what life insurance should cost. The worst part of it all is that you're insuring the mortgage company, not yourself; mortgage life insurance pays off the lender in the event of your death! But your survivors likely will have more pressing financial needs at that time. That's why plain vanilla term life insurance would suffice in such an instance.

Finally, extended warranties on electronics are another example of single-issue insurance policies that you should avoid. Consumer Reports says that 1 in 5 laptops will fail in the first 5 years. Yet, on the bright side, 80% will go for 5 years without a problem.

Another reason why extended warranties don't make sense is that the laptop or HDTV you buy today will be obsolete in 24 months. You shouldn't insure rapidly depreciating commodities.

There is a lot of confusion these days over what types of insurance you really need. There are only three. But first let’s discuss the kinds of insurance you don’t need. One kind of insurance you should never buy is credit life insurance, also known as “croak and choke.” Mortgage life insurance is the technical term. The salespeople pretend it’s a great idea, claiming that if you die your debts are paid off. But how important is it to pay off your debts when you’re gone? Basically, with this insurance, the bank gets paid off and gets your money instead of your heirs. In addition, the premiums are about 10 times as high as traditional types of life insurance. Mortgage life’s cousin is credit life insurance, and you are pushed to get this when you buy a car or other big purchase. These are sold as protection for you, but really they provide protection for the bank. So, it’s essentially like putting lipstick on a pig. Maybe it looks better, but it’s still a pig. Another popular item is the variable annuity. It’s almost never a good idea to buy one of these because there are monstrous commissions. What about cancer insurance? If you get cancer, you need health insurance and term life insurance, and that’s it. And, if you can’t work and need replacement of your income, you want disability insurance. Those are the only three you need. All the others you can chuck. What about your car? You don’t need rental insurance when renting a car, first of all. If you get in an accident, you’ll owe regardless of whether you have insurance. And usually your credit cards or auto insurance company has some type of temporary rental car coverage. PEC or “personal effects coverage,” which covers things stolen out of your rental car, is not necessary either.

Have you heard of disability insurance? People are much more likely to have life insurance than disability insurance, which pays you in the event that you can’t work. We’re three times more likely to get injured on the job than to die during our key working years. It’s offered from employers, but it’s sometimes not such a good idea to get insurance from your employer. Because of an obscure federal law called ERISA, states can’t help you if you get insurance from an employer. If you get cheated on disability coverage from an employer, for example, the government can’t help you. Therefore, insurers know they can collect premiums and not pay on claims. So, you should buy your own disability policy. That way, you’re protected without question. Usually 70 to 75 percent of your income is recommended. And don't get a policy that uses the Social Security Administration's definition of an illness. It's very strict. Keep in mind that disability insurance is not cheap, however. So, you may have to trim how much you get. But if you’re getting it from a large employer now, you might get burned when the chips are down.