Last week I wrote about the growing danger of identity theft and fraud as artificial intelligence systems become increasingly capable of making things appear real that are not. This may have caused some of you to begin seeking advice on how best to protect yourself from this threat. One option available is paying for third-party identity theft protection. But with so many options out there which one do you choose?
Part of the decision comes down to what you want the service to do and how much you are willing to pay. The various plans and services offered can be confusing, and the costs can vary substantially. Today I thought it might be helpful to break down some of the common elements included in these plans, explain what they do, and discuss how important they may be so you can be a more informed consumer before making a final decision.
Before we look at individual companies and the packages they offer, let’s first consider the types of protections often included in these plans.
First and foremost is the amount of insurance coverage included. Most plans offer at least one million dollars in coverage that reimburses expenses such as legal fees, lost wages, or childcare costs incurred while resolving identity theft issues. Many services will also assign a specialist to assist with the recovery process on your behalf. In some cases, depending on the plan and the circumstances of the loss, reimbursement for stolen funds may also be available.
The second element many plans provide is monitoring and early-warning protection. This type of service continuously attempts to detect suspicious activity and alert you quickly so potential identity theft can be addressed before significant damage occurs. Higher-tier services may not only monitor your credit reports but also public records, internet data, social media, and even the dark web for signs that your personal information is being used by someone else.
The final component many of these plans offer is a software suite designed to help protect you online. These packages often include antivirus software to protect your devices from being infected with malicious programs, a password manager to store and secure login information, and a VPN (virtual private network), which encrypts your internet connection in order to hide your online activity.
There are a wide variety of quality protection services available so I would encourage you to do your homework before making a final decision. However, based on multiple studies and reviews, two of the most highly rated providers that I have personally considered are Norton 360 with LifeLock and Aura. Both offer substantial identity theft coverage and extensive monitoring features, and each includes a suite of cybersecurity tools that varies depending on the pricing tier selected. The average cost for these services typically falls somewhere between about $20 and $40 per month.
For those looking for fewer features at a lower cost, radio personality Dave Ramsey endorses Zander Insurance. For about $7.00 per month you can purchase a more limited protection plan. It offers less total coverage and does not include the technological tools found in some of the more expensive services. However, if you believe your risk is relatively low, or you primarily want assistance cleaning up the problem after identity theft occurs, it may be a reasonable alternative.
A final low-cost option is to add identity theft protection as a rider to your homeowners insurance policy. The coverage limits are usually much lower than the millions offered by dedicated identity protection services, and these riders generally do not provide any preventative monitoring. However, at a cost of around $50 per year, they can still provide a basic level of financial protection against the expenses associated with restoring your identity.
Ultimately, there is no single solution that fits everyone. Some people may prefer comprehensive monitoring and cybersecurity tools, while others may be comfortable with a simpler and less expensive form of protection. The key is understanding what each option actually provides and choosing the level of coverage and service that matches both your personal risk tolerance and your budget.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)