Types of Credit card insurance
- Credit life insurance
- Credit disability insurance
- Credit temporary unemployment insurance
- Credit Property insurance
- 1. Credit life insurance that pays you off from all the debts that you owe if you die. In this case the beneficiary should be Credit Card Company.
- 2. Credit disability insurance protects you by giving minimum monthly payment on your behalf in case you became physically disable thus your credit rating is maintained. Usually this facility is for a limited period of time only. It does not cover any new purchase you made after your disability.
- 3. Credit temporary unemployment insurance protects you by giving minimum monthly payment in case you lose your job or you are out of work for few months. This insurance also does not cover any new purchases made after you laid off from job.
- 4. Credit Property insurance will pay for all the expenses for the items you bought on your credit card in case your credit card is lost or stolen.
Things you should know about your credit card insurance
- Your Credit card protection insurance only covers the minimum monthly payments until you die. If you always pay your full balance or you have never paid less than 25% of your monthly bill, in that case you should have a policy that will pay you more than minimum monthly balance. Thus make sure that you get complete details about you insurance policy.
- You need to be unemployed or physically disabled for more than a month before you start receiving your monthly payment from credit card companies.
- The monthly payment from the companies does not last for a year, instead it is for few months only, so double check the terms and condition before you opt for any insurance to avoid these nasty situation in the future.
- Always have 2-3 option in your hand before deciding about insurance deal. It might be possible that you will get a better deal than what your credit card company is offering you anywhere else. Thus research well before finalizing any one.
- Some policy may have age restriction factor. Thus for life and disability insurance they have different norms. Just check them before only.
- If you have a late or miss payment, it may be possible that your policy will not pay your claim.
- If in case you need to cancel your policy, you should know the procedure to do it.
It is also an important point to know how the credit companies sold or marketed the credit card protection insurance to the customers. Usually you will be asked to buy this insurance when you sign up for the credit card or may be later they engage you in telecommunication for this. Initially it is offered free but latter on sometimes companies pay you a small amount check to cash in your account as an incentive for you to try the credit insurance. As soon as you cash the cheque, you are enrolled in the program.
Thus you should consider your present and future financial needs before you decide for credit insurance. It may be possible that you have enough coverage in your other policies like in life and disability policy that you don’t need credit insurance policy. So before buying a credit insurance policy make sure that you gather all the information regarding that policy, its coverageand its pros and cons everything.