Published: May 17, 2012 11:47 PM EDT
Updated: May 17, 2012 11:54 PM EDT

CAPE CORAL, Fla. - A WINK News investigation uncovers insurance policies most experts say you just shouldn't buy. Two people who paid for mortgage insurance got in touch with us when they couldn't collect in their time of need. Now they're stuck making house payments when they thought they'd be taken care of. We found out, you can do better with your money.

"My husband was my best friend and I lived for him," Pam Denham told us about her husband, retired Rochester, Massachusetts police chief, Walter.

They bought a house and retired in Southwest Florida. When they were closing on their mortgage, they were offered a Borrowers Protection Plan.

"I said is that like life insurance? If anything happens to my husband?" recalled Pam.

They thought they were making a wise choice to protect their home when they decided to buy the plan, on the spot.

"I said if anything-- now if I sign this, if anything, anything happens to my husband, will my mortgage be paid off? And she said, 'Oh yes, Mrs. Denham, you don't have to worry about a thing," remembered Pam.

Six years later, Walter died from melanoma cancer, a disease Walter's doctors treated and thought they cured years ago. Now it was back and this time, it was fatal.

"In his last days he said, he kept saying to me, Pam, you're going to be OK because the mortgage should be paid off... he just kept saying Pam, you'll be OK," she said.

But Pam found out fast, she wouldn't be OK.

"The girl at the bank said, 'They're not going to pay your mortgage off.' And I, like-- wait a minute, we have, I signed an insurance policy," Pam explained.

And here's where the fine print comes in. Inside the policy it says it pays in full only if the death was "accidental" and cancer isn't.

"My recommendation typically is not to do them," says Paul A. Harris of Paul Harris Financial.

The Chartered Financial Consultant sells all types of insurance and says these protection plans usually aren't worth your money.

"They're just looking at one area of your mortgage. If something were to happen to you what about your car payment or some other type of payment?" He reiterated.

Consumer Reports says credit insurance is too expensive and leaves out too many things to be worth your money. Banks and credit card companies often offer them when you get a new credit card or loan.

Nine years ago Skip and Anne Riffle from Naples bought the same plan as the Denhams. About a year ago, Skip became disabled. It doesn't stop him from running "Bikes for Tykes" www.bikesfortykes.org,  but that doesn't pay the bills. So when they remembered they were still paying monthly premiums for their borrowers protection plan, they filed a claim.

"I received a phone call and the lady asked me, she said, 'I was, the reason for this phone call is, I was just wondering why you waited so long to fill out the coverage forms?' and i said to be honest with you, we forgot we had it," Skip remembered of the conversation he had with the bank.

Two days later, his claim was rejected.

"I was stymied. I had all the doctors letters saying that I was permanently disabled. I just couldn't understand why they rejected it. And I called them back and she said well you waited too long. I said waited too long?" he recalled.

Turns out, in addition to paying for it, remembering it, is also your responsibility. The policy says you have to file a claim within six months of becoming disabled, or you don't get a dime.

"They didn't say anything except it was accident and health-- you or your wife, the house is taken care of," said Skip.

Paul Harris says make sure life and disability policies you buy cover you completely.

"If you're going to get disability, whatever you do and you're good at, you want to make sure you cover yourself for that definition for disability," he explained.

The Riffles learned that the hard way. But they want banks, who often sell these policies, to change what they tell you when they offer these policies.

"At the disclosure time that they disclose to you properly what they mean when they describe things will be 'taken care of' or however the policy is worded. They explain it in detail to you, not just say it'll take care of, protect you and your wife. That's no protection, that's ridiculous. That's absurd," said Skip.

And Pam Denham is fighting back too.

"Here all this time my husband had piece of mind. I'm angry because he passed thinking that I would be OK and I'm not ok. I asked specifically the day we signed those papers, if anything, anything happened to my husband would my mortgage be paid off?" reiterated Pam. "I feel angry that we were duped into this. I feel like we were taken advantage of."

We contacted Bank of America, which sold both of these plans. Here is what they told us:

"While we cannot disclose details about the customers' benefit requests due to privacy reasons, we believe the matters were handled appropriately and in accordance with the Terms and Conditions of the Borrowers Protection Plan Addendum.

Borrowers Protection Plan is an optional loan protection plan that is offered to customers on Bank of America eligible loans during loan application.

Customers are provided with oral disclosures when the Plan is first presented.     

Customers are also provided with written disclosures and a copy of the Addendum containing the Terms and Conditions prior to enrollment, and they must sign to acknowledge that they have received the disclosures and indicate their election to 'accept' or 'decline' enrollment.     

For plans containing an Accidental Death feature, the protected borrower's death must be directly due to accidental injury. Death caused by disease or treatment of disease is excluded. If eligible, the benefit amount is the outstanding balance of the loan as of the date of the Accidental Death."

It's also important to point out, that while these mortgage protection plans seem like a good deal, with no health check-up required, and lower premiums, other, bigger disability or life insurance plans cover a lot more.

Finally, in fairness to all the banks and credit card companies that sell these policies, the federal government says it gets very few complaints about them. Still, that doesn't mean it's the best way to spend your hard earned money.