What the salesperson is not telling you about protection plans
I sold these. Not because I believed in every one of them, but because they were part of the job and the targets were real.
So here is the version I would have given a friend.
How the maths works
An insurance product is priced so that the company collects more than it pays out. That is not a criticism, it is arithmetic, and it is true of every insurance product including the ones you should definitely buy.
You buy insurance when the loss would be catastrophic and you cannot absorb it. A house fire. A serious illness. A car written off.
A phone is a known, bounded cost. Unpleasant, not catastrophic for most households.
So the question is not whether the plan is a rip off. It is whether you would rather pay a predictable small amount monthly or risk an unpredictable larger amount occasionally.
The numbers they do not put together for you
Monthly premium times the term. Call it a few hundred dollars over two years for a typical plan.
Plus the deductible, which is per claim and is often substantial for a screen replacement and much more for a full replacement.
Add those together and compare with the actual out of pocket cost of the repair you are insuring against.
For a screen repair on a mid range phone, the plan frequently costs more over the term than the repair would. For a full replacement of an expensive phone, the plan can win.
Nobody does this sum in the store because the premium is quoted monthly and the repair cost is not quoted at all.
The details that matter
What you get on a claim. Some plans replace with a refurbished unit rather than new, which is reasonable and worth knowing.
How many claims per year are allowed.
Whether loss and theft are covered, or only damage. This is a significant difference in price and in usefulness, and people frequently assume theft is included when it is not.
Whether there is a waiting period at the start.
Who does the repair, and whether using them affects your manufacturer warranty.
How long a claim takes. A plan that leaves you without a phone for ten days has a cost that is not on the price list.
The alternatives
Your credit card may already cover it. Some cards include purchase protection or cellphone protection if you pay the bill with the card. This is genuinely common and almost nobody checks. Read your card's benefits guide.
Your home insurance may cover personal property away from home, subject to your deductible. Often the deductible makes it pointless, but check.
Self insurance. Put the monthly premium into a savings account. After two years you have the money and if nothing happened it is still yours. This works if you have the discipline and if you could absorb the loss in month two, which is the weak point.
A case and a screen protector, which cost very little and prevent most of what the plan pays for.
When I would buy one
If you are hard on devices and you know it. Some people break a phone every year and they know who they are.
If you have children using the device.
If losing the phone for a week would genuinely disrupt your work and the plan offers fast replacement.
If it is an expensive flagship and you could not comfortably replace it tomorrow.
When I would not
A mid range phone, a careful adult, a case on it, and enough savings to absorb a repair.
What to actually do in the store
Ask for the deductible in writing before you agree. This one question changes a lot of decisions and it is the number that is least often volunteered.
Ask whether theft is covered.
And do not decide in the store. These plans can almost always be added within a window of a few days or weeks, so there is no reason to sign under pressure at the counter. Go home, check your credit card benefits, do the sum, and then decide.
Nobody ever told me that when I was standing behind the counter, which is precisely why I am saying it now.
