Assurion vs Upgrade

[richie72846]

I was eligible for the new every 2 upgrade back in November. I have not used it. I have an iPhone 4 (16gb) and I'm paying $9.99 a month for assurion insurance. If i loose my phone I have to pay $169 non-refundable deductible for a replacement. However, if I use my upgrade I can get a replacement iPhone for nothing. 3 questions.

1. How long do I have before I have to use my upgrade before it goes away ?

2. Can assurion insurance be canceled at any time ?

3. Doesn't it make sense to canx. the assurion insurance ?

[#2]

I am confused by your post.  New every 2 went away long ago, I believe.  Anyone can buy a new phone with a subsidized price by signing a new 2 year contract as long as you are at the end of your current contract or are a new customer.  Basically, you can purchase a $600 phone for $200 (approximate).  In my opinion, insurance on a cell phone makes little or no sense, especially $9.99 per month.  That's crazy. 

[richie72846]

All I know is that today while in the Verizon store the sales girl checked my account and said I am eligible for an upgrade and a new iPhone would cost me ZERO. I don't agree with your opinion that $9.99 a month is crazy. A new iPhone cost $600. At $9.99 a month it would take 5 years to pay for an iPhone.

[#4]

So, why did you ask for opinions?  An IPhone 4 is free.  IPhone 4S is $100, IPhone 5 is $200.  Those are the upgrade price and don't include a New Every Two discount.  That program ended over 2 years ago and the last discounts expired 4/15/2013, I think.  Insurance on a cell phone makes no sense.  You have to figure the odds you will ever file a claim and collect, the deductible, and the premiums.  For $9.99, you could insure a car or small house or sizable life insurance policy.  Suppose there is a 25 percent chance you will file a claim and collect.  That would give you a EMV of $150 less $169 deductible less the premium payments.  If this claim happened after 13 months, that would generate a lose of $149.  Put the $9.99 per month in your Roth IRA.

[spitxfire]

If you don't want insurance that's fine, but for smartphones I think you definitely should.  I have a basic phone still and opted out of having the insurance, full retail for a basic phone is still under $200, while a smart phone is not.  When your phone breaks don't come crying to Verizon about it. 

Don't forget the $30 upgrade fee for your iPhone 4 if you do go for it.

[#6]

It is not a good financial choice unless you lose, break, or have stolen almost every smartphone you own.  If you are careful with your $600+ phone and rarely or never incur a lose, insurance is a total rip off.  I have had cell phones since cell phones were invented and NEVER had one to fail, break, lost, or stolen.  I would much rather invest my money and pay $600 for a new phone every 20 or 30 years if necessary.

[#7]

Use that money to buy some Verizon stock and retire early.

[spitxfire]

Yeah but if you're a year in to owning your iPhone 5 16GB and paid insurance you can either pay the deductible of $170 or go full retail for like another $600, I don't have $600 to spend but $170 sounds like a lot better option.

To each their own.

[#9]

Again, it depends on the odds you will ever collect on a claim.  For most people, INSURANCE ON A CELL PHONE MAKES NO SENSE.  Why do you think Asurion sells you insurance?  They make a ton of money.  Where does that money come from?  People paying in more than collecting.  You never spend insurance dollars on cheap electronics, etc.  Spend insurance dollars on your life, health, disability, cars worth over $5,000, house, etc., not a $600 cell phone.  Go talk to any financial adviser.  I wonder how many people paying for insurance on their cell phone don't have a penny's worth of disability insurance or long term care insurance if you're over 50?  How many have no retirement investments or even a Roth IRA?

[#10]

Might I add that all stores today offer you insurance on almost everything. It is a cash cow to the companies. Another thing people don't realize is many items have a standard 1 year warranty and when you pay insurance you are paying for a year that is not even under insurance which actually kicks in on year two. So lets see a iphone costs $650 you subsidize and pay $200 for it with a two year contract. now the amount of $450 is paid off over 24 months. Now there is a 14 day return policy with a $35 restocking fee. And a full year of manufacturer warranty after that. so you pay $10 for 24 months now thats $240 so now you costs toward the iphone are now at $210 but you have a $169-$199 deductible so you paid all of the phone except $11   You have not even taken into consideration the costs of your plan to pay off that subsidy so now you have paid $240 more for your device than what it actually costs. Not smart. And that first year was cream since its over lapping coverage.

I never buy added insurance on anything. Like Jim I take good care of my toys