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Credit Card Insurance - Is it Worth the Money?
Insurance is a very important thing for everyone and depends upon the specific needs of each individual. The same applies for credit card insurance. Although, when applying for a credit card, the insurance options sound great, in such scenarios as losing a job or half of your monthly income. But, with many insurance policies, it is vitally important to check exactly what you do receive, as the level of insurance you choose depends on which type of cover you are entitled to.
It is important to understand what types of credit card insurances there are available and whether they benefit you or not. There are four major types of credit card insurance: life, disability, involuntary unemployment and property.
- If you choose credit life insurance, then this will pay the amount remaining on your card at the time of your death, as long as the name beneficiary of the insurance is the card company.
- If you choose credit disability insurance, then the insurance will cover the minimum payment that is due on your card for a specific period of time after a medical disability. But remember that purchasing credit disability insurance after you have already become disabled will not entitle you to this cover.
- If you choose credit involuntary unemployment insurance, then the insurance will pay the minimum payment that is due on your account if you are sacked or demoted for a specific period of time. Again, purchasing a credit involuntary unemployment insurance after you become unemployed will not entitle you to this cover.
- Credit property insurance may be included with your credit card. This usually provides payment of items that have been purchased with the credit card, but have been destroyed or, in some cases, stolen.
So as you can see from the above four types of credit card insurance, disability or unemployment credit card insurance only covers the minimum payment and only for a short period of time. It is also important to know that if you have a number of different credit cards, then it is necessary to purchase separate insurance for each one.
It is important to remember that when purchasing life or disability insurance, then you may receive a better coverage at a cheaper rate. Also, once your credit card balance has been paid by the insurance, then your dependants would receive the remaining amount.
When applying for credit card insurance, it is important to ask the issuing company, before committing yourself, these simple questions:
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Which situations apply whereby they do or do not pay?
- Is there any age restriction for life or disability insurance?
- What are the policy requirements? For example, if a payment is missed, is a claim filed upon you.
- How many coverage options do you need to purchase?
- What is the yearly cost of the insurance and how regularly do the rates increase?
- If you choose to cancel the policy, how is this done?
Many people feel that credit card insurance is a waste of money as it is possible that you will never need to make a claim and that putting that money to better use would be much more sensible. But remember that no-one knows what will happen in the future, either near or far, and having credit card insurance will give you the peace of mind that you are covered for the unexpected things in life.
Kerry Hedden is one of the owners of http://www.weoffercreditcards.com/ and believes that everyone should have a credit card and use them responsibly. That is why you will not only find the best credit card offers on our site but great articles and advice for using them wisely. We offer 100% original and free content articles that may be used and published.
Source: www.articledashboard.com