What You Need To Know About Credit Card Protection Insurance
Posted by: Staff Writer | Jul 15,2007
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Whether to purchase credit card protection insurance can be a hard decision. Like most other insurances, it is a matter of personal need and situational variable. Everyone who uses a credit card needs to know the advantages and disadvantages of credit card protection insurance.
It's important that every credit card holder is familiar with the types of credit card protection insurance and what it does.
There are four basic types of credit card protection insurance: life, disability, involuntary unemployment and property. When in action they most often cover the minimum payments of the credit card.
What You Need To Know About Credit Card Protection Insurance: The Types- Credit life will pay the amount on the credit card when you die, but the credit card company must be the beneficiary.
- Credit disability will cover the minimum payments for a specified amount of time, but will cover nothing else or any new purchases.
- With the involuntary unemployment credit card protection insurance, your minimum payments will be made after you are laid off, but no new purchases are covered.
- Credit property will pay for your purchases bought with the credit card if they are lost or stolen.
They can be a serious lifesaver in hard times but there are some little known facts that everyone should be aware of.
The Most Important Things You Need to Know about Credit Card Protection Insurance- Credit card protection insurance will most often only cover the minimum payments unless you die. If you always pay your balance in full or never pay less than 25 percent of your bill, that is about to change. This is in most cases. You may have a policy that does cover more than the minimum balance. Make sure that you are fully knowledgeable so you know what to expect.
- The payments may take a while to start. Some policies take two weeks to go into effect. Don't be afraid to ask. You may have to be disabled or unemployed for up to a month before the payments kick in.
- The payments may not last a year, but only a few months. Make sure to check out the terms and conditions before you get any nasty surprises.
- You may be able to get a better deal elsewhere. If you don't like the deal you're getting from your own credit card company, see if you can go elsewhere for credit card protection insurance.
- Some policies may have an age restrictions for life or disability insurance.
- The policy may not pay on a claim if you're late or have missed a payment.
- Know how to cancel the policy if you need to.
- You may be paying for it and not want it. Many credit card companies add this automatically into your account. This doesn't mean that you have to have it.
Most of all, be aware that credit card protection insurance is optional. It is not mandatory and you do not have to take it. Consider your situation. For most people, insurance is the best money you'll ever throw away. So be sure to know exactly what you're buying and exactly what it will cost you. A certain satisfaction comes from knowing your affairs are in order. It may be worth it to you just for the peace of mind it provides.
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