If you have a credit card, there’s a good chance you’ve been asked if you would like to add credit card insurance. Sometimes it’s offered when you first sign up for the credit card, sometimes it’s when you call the number on the card or visit the website to activate the card, or sometimes it’s by a telemarketer. Most of the time, the insurance coverage is offered for a free trial, for 30 or 60 days, which will continue unless you cancel it.
Credit card insurance is meant to cover your monthly minimum payment in case you lose income from illness or job loss, or to pay your balance in full if you should die. Credit card insurance coverage sounds good in theory, but there have been many people who have reported trying to put a claim in for insurance coverage when they’ve lost their job who discovered their job loss wasn’t eligible for coverage. Others tried obtaining insurance coverage when they became too ill to work, and discovered their illness wasn’t covered. If you are considering card protection insurance coverage – first make sure it covers what you think it covers! Additionally, most insurance plans will not cover job loss for self-employed individuals, so if you are self-employed – better check on this before purchasing.
Most people have disability insurance and/or life insurance which will cover your credit card payments, which makes having a separate credit card protection insurance policy unnecessary. If you don’t have a disability insurance or life insurance policy – you may want to look at these options prior to signing up for credit card insurance, as you may find you get more coverage for your money through those options.
Credit card protection insurance only covers you for one credit card – so if you have multiple cards you would need to sign up and pay for it on each card. The typical price is around $0.89 per $100 you spent each month. It may not sound like a lot, but can add up to thousands of dollars over the years.
If you already have protection insurance and you want to cancel, be prepared to speak with a pushy sales person. They will try to convince you that the product offers so many benefits that you are crazy to cancel, but if you’ve made your decision to cancel simply be firm and demand that they stop billing your account immediately and cancel the coverage. Most people aren’t even aware they have insurance protection, but you can see it listed on your statement if you’re being charged for it.