An Introduction To Credit Card Insurance Part I

Credit cards offer several insurance benefits that can prove very helpful in case you run into unexpected and unfortunate financial circumstances. Granted, they are seldom used by most cardholders and, as a result, is a huge source of profit for the company.

Make sure to read your terms carefully, as they can include one or more of these insurance types. Pile on two or more of these and you can be looking at considerable fees you didn’t even know you were buying into. In some cases, credit card companies may offer some of these insurance for free as part of your card’s perks.

It will also pay to ask for what documentations need to be accomplished before getting approved for a claim so you can be ready when it happens.

Credit Disability Insurance

This insurance is designed to protect cardholders who are suddenly unable to fulfill their financial duties due to disability. If you are an illustrator, for instance, who suddenly lost your hands in an accident, the insurance company will pay the minimum balance on your card each month for purchases incurred before the disability and only for a set number of months (depending on your contract).

Terms can vary between credit card companies so there’s no hard and fast rules to expect in terms of numbers. This insurance is intended to keep you from incurring a negative credit rating which is a likely result when you’re unable to settle your monthly minimums.

Want to know more about credit card insurance options? Read about them on tomorrow’s installment…