Can’t Work? Don’t Worry About Your Credit Card
If you own a credit card you have probably been asked by the provider if you would like to add credit card insurance. Most people aren’t sure what this type of insurance is. As such they either decline it or accept it automatically without understanding what they are signing up to.
What is credit card insurance?
Like other types of insurances, credit card insurance provides you with certainty your financial obligations are met if anything happens to you. Depending on the provider, insurance could pay up to 7% (over three times the minimum monthly payment required) of your credit card balance each month. It covers in situations such as involuntarily unemployed or temporarily disability. It also may pay out the balance of your credit card (up to $50,000) in the event of your death.
One of the best features of card insurance is you can claim even when you are entitled to other benefits. For example sick leave, worker’s compensation or Centrelink. Most providers have guaranteed acceptance and you don’t require a medical examination at application time.
The criteria for card insurance varies from provider to provider. Generally you must be at least 18 but less than 65 years old and be employed on a minimum basis varying from 10 to 20 hours per week.
Do I need credit card insurance?
As with all insurance, each person’s needs are different due to our different lifestyles and obligations. Credit insurance may be beneficial to some but may be an unneeded expense for others. Understanding your money behaviour patterns might help you understand if you need it.
Considering your current and further financial needs is the first step in determining if you might benefit from card insurance. If you already have sufficient life and income protection insurance, it may be that you do not require it, however, if you do not have any or sufficient life and income protection insurance, it may mean that credit card insurance could be a good option for you.
For more information about credit card insurance and to determine what is suitable for your needs and objectives, contact us.