“The ability to pay your debt is important for your financial security. However, what happens if you are not able to make your payments? Succumbing to a disability could put you out of work for a long period of time. Your property could be destroyed in a bad storm before you finish paying for it. Credit card insurance could be something worth looking into.
Credit Card Life Insurance
If you die, your credit balance will be paid off. This can help relieve your family of at least one of your debts upon your passing. Without insurance, your family will be asked to pay your debt for you. You should be aware that you may already be covered if you already have life insurance through another provider. Therefore, it may not be worth carrying.
Credit Card Disability Insurance
Those who become disabled will have their current balance paid off. Keep in mind that future purchases will not be covered under this policy. Also, you will need to carry a policy for any of the credit cards that you currently have. However, this may be a good policy to have if you are really concerned about your credit score.
Credit Card Property Damage Insurance
Items that are damaged or stolen will generally be covered under the terms of this type of policy. The downside to this coverage is that many different policies offer this coverage as well. Your homeowners policy will cover the cost of anything damaged or stolen from your property. Renters insurance will generally cover this type of damage if you rent an apartment. Avoid this extra coverage if at all possible.
Other Pitfalls Of Credit Card Insurance
There are a a few other pitfalls of credit card insurance policies. The biggest pitfall is that there are many exclusions. You really have to read the fine print before agreeing to a credit card insurance policy. Another pitfall is that you are almost conned into buying a policy. One common tactic is to offer you a free 30-day trial. However, it is very difficult to cancel the policy after the trial is over.
Do yourself a favour by avoiding credit card insurance if at all possible. There are plenty of other policies that will offer you the same coverage for less. Purchasing a life insurance policy should cover your credit card debt as well as other debts you leave behind. Private medical insurance should help you cover your bills if you are ever out of work due to a medical issue. In other words, there is already coverage available to you if you are ever sick or injured. Go with that instead.
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