When Should You Consider Getting Insurance Through Your Credit Card Company?

Most credit card companies offer insurance to their card holders. This article takes a look at the different types of policies that are available for consumers. It also provides suggestions on who makes a good candidate for each type of insurance.

By now, most people with a credit card know that they can obtain credit insurance from the company through which they obtained their account. Many people decline this type of insurance right away simply because they don't understand what it covers, don't expect that they will ever need it, or just don't have the money to spare. In many cases, the insurance offered by credit card companies is never going to be used, but what if you are one of those people who might actually benefit from getting credit card insurance? When should you consider getting insurance through your credit card company?

When Should You Consider Getting Credit Disability Insurance?

If you become unable to work due to medical reasons, credit disability insurance will pay your minimum monthly payment for the credit card account that is attached to the policy. Unfortunately, a pre-specified timeframe dictates how long these payments will be made. Any purchases that you make to the account after the disability occurs will not be considered for payment purposes. If you have a job that places you at risk of serious injury, you might want to consider this type of insurance. Another reason to think about signing up for a policy of this nature is a strong family history of diseases that lead to the loss of the ability to work.

When Should You Consider Getting Credit Life Insurance?

It is important to understand two facts about credit life insurance. First, this type of insurance only comes into effect if you die. Second, the policy's beneficiary must be the company that gave you the credit card. If you should die, this policy pays off the credit card debt in full for you, avoiding the need for your family members to do so. If your job places you at risk of death, then you might want to consider this type of policy to protect your family.

When Should You Consider Getting Credit Property Insurance?

If you obtain credit property insurance, the policy cancels the debt you owe on completely destroyed property that you purchased with your credit card. Of course, the property must have suffered damage according to the terms listed in the insurance document. As long as you do not have a deductible in place, your debt is canceled in full. If you live in an area that frequently experiences severe storms, such as tornadoes, hurricanes, hail storms, and thunderstorms, credit property insurance might be a good idea.

When Should You Consider Getting Involuntary Unemployment Credit Insurance?

In the event that you lose your job due to a lay-off or downsizing by the company, an involuntary unemployment credit insurance policy will pay your minimum monthly payment for a set period of time. The payments will not cover any new purchases that are made after the time that your unemployment occurs. Anyone who frequently falls victim to this scenario should consider looking into this type of coverage.

The Benefits of Buying Credit Card Insurance

Perhaps the most important reason to consider obtaining this type of coverage is that it can protect your credit score. As long as the minimum monthly payments are made and you keep current on your other bills, your credit score shouldn't drop a great deal You will also avoid late fees and exorbitant increases in interest charge.

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