Credit card protection insurance would supply the policyholder with an income that would go towards them being able to meet the demands of their credit card balance each month. You could choose to search and compare the cost of the premiums with an independent provider which is generally the way to make the biggest savings. You would also be able to check the contents of the cover and find out when you can make a claim, if needed and for how long those repayments would continue providing benefit.

One of the things that are taken into account that would go towards the premiums is the percentage of your monthly outstanding balance on your credit card that you choose to protect. The provider would pre-agree to this amount and it is then the sum of money that you get back each month should you need to claim. This income then goes to you being able to continue meeting your credit card outgoings and so not fall behind on the bill when it was due. You could have to stand to the first 30 days of redundancy or incapacity before claiming on the policy but there are providers that might ask you defer from making a claim until day 90. This can be a long time before seeing any money as you could already be behind on your repayments and your provider could be sending out letters.

Being able to maintain your balance on your credit card each month is essential. If you should not be able to find the money to pay the balance and fall behind on what you owe you could have to struggle to catch up even if that’s possible. If it is not then your lender could take you to court and of course you would no longer have your credit card to rely on. You would also see your credit rating affected and this can take a great deal of time to repair. During this time any future borrowing could become almost impossible or you could have to pay more in interest charges.

Credit card protection insurance can be taken out to suit your needs if you do not want the protection of both unemployment
and incapacity in one policy. If for example you get a good sick pay plan you might just want to insure against becoming redundant. However if it suited you better then you might take out incapacity protection on its own. Check the policy to see if the provider offered carer cover. If they do then the policy would pay out an income for you to put towards your credit card outgoing if you were to take time from work to look after a loved one who was incapacitated. You would not have the worry of finding a stranger to come into the home and be the carer nor would you have to pay out the associated costs.

Credit card protection insurance can ease the financial worries associated with losing your income to redundancy or unemployment. If you suffered either of these events then you would lose your income and a loss of income means you would have a struggle on your hands to find the money to continue meeting your credit card bill each month. With the protection behind you there would be a substantial sum of money coming into the home which you could use towards your bill.

The income you would receive each month from the policy, tax free, would be the sum of money you had chosen to insure. This is up to a certain percentage of the monthly outstanding balance on your credit card which the provider pre-agrees with when you take out the card. The benefit from the policy would begin to provide you with your income if you became a victim to one of the events you had chosen to insure between the 30th and the 90th days, and then continues for between 12 months and 24 months depending on your chosen provider. Some providers will backdate your income to the first day that you became unable to work or were made redundant so this would have to be checked in the small print.

The income provided from the payment protection policy would be a welcome sight as without it to put towards your credit card bill you could be unable to maintain it. Depending on how you choose to use your card the monthly outstanding balance could add up to a considerable sum of money. With cover to fall back onto you would have security of at least a substantial amount towards servicing the bill. With the high rates of interest that is charged by lenders if you cannot pay off the monthly outstanding balance it will roll over each month until you could find you cannot even manage to maintain the minimum payment of the credit card.

When taking out credit card protection insurance with the standalone provider you can choose the level of protection you want which would be the most suitable for your circumstances. Of course you can choose to protect against both unemployment and incapacity together if you want and would then be eligible to make a claim if you were to suffer from either event. If your employer provides full sick pay then you might just want to take cover to protect against the possibility of losing your income to redundancy. However you could also choose to take out protection against incapacity alone if this suited your lifestyle better.

Credit card protection insurance protects a percentage of your monthly outstanding credit card balance against the possibilities of falling sick, suffering an accident or being made redundant. You can choose the percentage of your monthly outstanding balance you want to protect and this sum of money would then be paid back to you if you should become a victim to one of the insured events. Protection can be taken out to insure against the possibility of both unemployment and redundancy together or you can choose just to take cover against unemployment or just for incapacity if this would suit your lifestyle better.

The percentage you choose to cover would have to be agreed by your chosen provider as it is the amount of money you would get back if you should have to make a claim on the insurance. You would need to wait for a certain amount of time before claiming and this is dependent on the terms offered by the provider with some offering to payout from day 30 and others asking a wait of 90 days. Payments might continue over a 12 month period of time while some offer to payout for up to 24 months which would need checking before buying. You also need to check to find out if the provider will backdate the benefit back to the first day of your redundancy or from you becoming unemployed.

Your credit card protection insurance payments would be a welcome sight each month while you looked around for work or made a recovery. You would not have to struggle each month to find the money needed to maintain the monthly repayment of your credit card as the policy would provide a substantial amount towards it. Worrying about being able to get the money together for when the repayment was due could add more stress onto what is already a very stressful situation already and could have an effect on your job search or recovery.

How much you pay for the monthly premiums for credit card protection insurance would depend on your chosen provider and is usually based on the percentage you choose to protect, your age when you apply for the cover and the level of cover taken. If you choose a provider that offers age based protection the younger generation can make some of the biggest savings when covering their monthly credit card balance. The lender will usually give you the option of taking out cover for your credit card at the time of taking on the card. However this can be one of the dearest ways of protecting your repayments. You would be paying for the protection in with your credit card which usually means that you pay interest on your protection.

Credit card protection insurance should be considered by anyone who uses a credit card on a regular basis. Some might use their card to make their monthly incomes spread out while others could use their card for everything from putting petrol in their car to paying for the weekly food bill. Whether you have a huge credit card bill each month to maintain or a small one, covering it against the possibility of becoming unemployed or incapacitated does need to be given some thought.

One of the cheapest ways to take out credit card protection insurance is with a standalone payment protection provider. Such a provider will only sell payment protection products which include credit card cover. They will offer competitive premiums and provide information on the exclusions that are included in payment protection. You take a policy out by insuring a percentage of the monthly balance that is outstanding and this is the sum you get back if you should have to claim.

The income would then be used towards maintaining the repayment of your credit card and could stop the lender from taking you to court to claim back the money you owe. If this should happen due to you being unable to pay your credit card bill you could gain a County Court Judgement against yourself. This will affect your credit score which could then stop you from being eligible to get credit of any type in the future. A bad credit rating can also take a great deal more time to repair than it did to destroy it.

Credit card protection insurance will be offered when you take on the card with the lender. However if you should choose this as an option you would usually pay well over the odds for the protection. In some cases in the past credit card insurance was added into the card without you knowing what you were getting. There are exclusions in all policies offered by all providers and if you do not know about these and have not compared them against your circumstances then you might not be eligible to claim. In 2005 the Office of Fair Trading and the Financial Services Authority investigated the sector and found that mis-selling had indeed occurred. As a result several well know lenders received fines and recommendations were set out for selling cover. There have already been many changes and more will be seen in the future. Lenders will not be allowed to sell credit card cover at the same time as their credit card agreements. Instead they will have a 7 day period of waiting before being able to ask if the consumer wanted protection. They will also have to make it clear that the consumer can choose to shop around for the policy themselves.

Credit card protection insurance is an essential consideration for anyone worried about his or her job security.

With firms closing and laying off workers at such a fast rate, it makes sense to look at your options – and one of the main points to remember about redundancy cover is you can only apply for cover when you have a job.

If you have high balances on your credit and store cards or can only manage to make the minimum payment each month, then you need to consider how you would pay the bills if you lost your job tomorrow.
The fact is that your redundancy payment is likely to be a lot smaller than you think – and you will get virtually nothing if you have been with your employer for less than two years.

Sit down for a few minutes and do some sums – add up your monthly outgoings and your income if you had no job. The gap between what’s coming in and what’s going out is probably several hundreds of pounds.

Credit card protection insurance will meet a percentage of your card bills each month – paying enough to make sure you don’t slip in to financial hardship and have a blot on your credit rating.

Meanwhile, you have extra financial support for at least a year giving you time to find another job.

As an added bonus credit card protection insurance also covers you for being unable to work due to accident or sickness.

Like most insurance products, there are some exclusions and conditions for cover that include:

• Only losing your job through no fault of your own is protected
• You can’t apply if you already know you are going to be made redundant
• The policy has a qualifying period of up to 120 days, during which you can’t make a claim for losing your job, accidents or sickness
• Pre-existing health conditions must be notified to the insurance company on application
• For women, pregnancy is typically not covered under the health side of the package

If you are taking out a new card, the provider will probably offer credit card protection insurance when you sign the agreement.

Before ticking the box to take their deal, it’s certainly worth looking around the market for independent insurers who may offer better or similar cover at less cost.

Also, if you already have credit and store cards but no credit card protection insurance, you can apply to an independent insurer to start the cover whenever you like, providing you meet the application criteria. Just remember, you can only apply while you are in work, so don’t leave it too late.

The more you use a credit card, the more you will need credit card protection insurance. The policy could be very beneficial if used at the right time as its main purpose is to provide financial help in the form of payments towards your monthly credit card balance.

The policy is designed to pay out a tax free amount if you are unable to work due to involuntary redundancy or if you are temporarily off work due to an accident or if you are ill.

Once payment has started, you can expect it to last for 12 or 24 months depending on the provider you choose. Policies can be obtained from your credit card provider but if you want to get the best rates on premiums you’re better off looking at policies from independent protection companies.

Before selecting your policy you should know a few things. You will need to meet minimum employment criteria as set out by the provider. Typically the period is six months. There are rules relating to entry and maximum ages, number of hours worked per week, exclusions relating to existing medical conditions to name a few.

To know more about these rules and regulations, you will need to read your provider terms and conditions.

Provided you meet the requirements of the provider, once your policy is in force and you need to make a claim there will be a 30 – 90 deferment period.
The payment will cover the existing debt at the time of the claim. With some providers if you incur additional debt after the benefit payments begin, this additional period will not be covered.

Selecting A Provider

To get the most out of your credit card protection insurance you need to be wise when making your selection. This means obtaining quotes from various companies so that you have options.
If you take out a credit card your provider will try to sell you their credit card protection insurance at the same time but you don’t have to take it. The Competition Commission is actually trying to make it illegal for providers to sell you credit protection within 14 days for your credit card approval.

One person who agrees with this is Simon Burgess, Managing Director of independent protection company British Insurance. Simon says ‘IF the Competition Commission is successful, this will be good news for consumers. They will be able to compare the market and make the best decision for them as opposed to being force fed the product of the company from which they took out credit’.

Summary
So as you can see, credit card protection insurance is quite useful for maintaining your credit card bills if you are unable to do so because of loss of income. It can take the stress away so you can concentrate on returning to health or finding another job.

When it comes to insurance, most people think of their house or their car, but it is also possible to insure our financial commitments. While having your car or home broken into or damaged in stressful enough, being unable to meet a debt through no fault of your own may be just as damaging in certain circumstances. Should someone lose their income due to ill health or redundancy, the stress can be exacerbated by mounting debts which, if left unpaid, can lead to a poor credit rating and unwanted attention from creditors. Credit card protection insurance is a policy which guards someone’s ability to keep up with their card-related debt if their income is lost unintentionally.

To qualify for a successful claim on this type of insurance, someone will need to be without an income due to being ill, suffering an injury after an accident, or having been made involuntarily redundant. Effectively the card insurance provider will pay back part of someone’s outstanding balance every month they are without an income due to the reasons mentioned above. This can carry on for quite some time, up to around 12 to 24 months depending on the policy itself.

Credit card protection insurance can not only help someone to continue paying a card debt, in the grander scheme of things it will help guard someone’s credit rating, which if tarnished can affect their ability to get credit in future.

This type of cover works by guaranteeing a percentage will be paid back for each month after a successful claim. So if someone takes out a policy guaranteeing 10 per cent of their outstanding debt, the first payment made by the insurer on a debt of £1,000 pounds would be £100.

Typical conditions include that the policy must be bought for the person named on the card itself and must be taken out by them. This means someone cannot take out protection on behalf of another. Normally the policy holder will have to be a full UK resident. People will also not be able to claim if they end up out of work due to a pre-existing medical condition. This essentially means any health problem which was diagnosed before the policy was bought. So if someone has a history of severe asthma, and ends up out of work because of it, they will not normally be able to claim on their credit card protection successfully.

This type of credit card protection insurance is often offered by big insurance firms and banks, plus card providers themselves. Although it may seem convenient, this is not always the best way of getting the best deal available. You are quite entitled to take protection from a firm which is different to your card provider and firms like protection specialists British Insurance specialise in supplying just this kind of cover and may be able to save someone money.

If you compare credit card protection insurance online with an independent provider you would make a great deal of savings in comparison with having the policy added in at the time of taking out the card. High street lenders are well known for the high cost of protection that brings that in £4 billion in profits. If you choose an ethical provider for your policy you will also be provided with plenty of information regarding the cover and the exclusions.

If you choose to take out credit card protection insurance with leading payment protection provider British Insurance, you can pre-agree to insure a percentage of your monthly outstanding balance on your credit card. This sum of money would then be given back to you each month for the term of the policy, which with British Insurance would be 12 months, if you became unable to work or were made redundant. You do have to stand to a deferment period before claiming on the insurance and with British Insurance this is 30 days. They also date back the money to day one of your redundancy or from being unable to work.

You can search and compare with other providers, however you would have to find out when you can claim as some providers could include a deferment period of as long as 90 days. You would also need to check to find out how long the cover would provide you with an income for as some payout for up to 24 months. Whilst looking at the terms and conditions check for exclusions, as there will be some. A policy from ethical British Insurance will come with just a few of the most common exclusions but others could add in many more. Exclusions have to be checked against your current lifestyle so that you can be sure a policy is suitable.

Being able to maintain your credit card repayments is essential. If you cannot you would no longer be able to use your credit card as the lender would stop it. Secondly your credit rating would get a bad mark against it and this can mean future borrowing would be impossible. However a good credit rating is not just needed when you want a loan, it is also taken into account if you apply for a new monthly mobile phone contract or home shopping catalogue. Of course you would also have to make an agreement with the lender to catch up on what you owe on your credit card. As you have not got an income coming into the home this might be impossible. Therefore they could take you to court and it is possible that a judge could order bailiffs into your home to take your belongings. Credit card protection insurance could stop any of this from happening.

The truth is credit card protection insurance could be a very beneficial policy if taken at the right time and under the right circumstances. It is designed to provide you with financial assistance when you need it. The policy will pay a percentage of your monthly credit card balance if you are unable to work due to an accident, unforeseen redundancy or sickness.

The benefit from the policy is paid for a period of 12 or 24 months subject to the provider’s terms.

You can take out a policy from your credit card provider however there are some very competitive rates on premiums if you visit independent protection providers as well

It was mentioned earlier that credit card protection insurance must be taken at certain times and circumstances, let’s expand on this.

Most providers will require a minimum employment period of at least six months before you can take out a policy. In addition there are certain circumstances such as age and working hours and medical conditions that will not be covered under the policy terms and conditions.

You need to check your provider terms and conditions before signing up for a policy so that if you did need to make a claim the application will be successful.

Once you have a policy, there are varying deferment periods from lender to lender. Generally you’ll have to wait between 30 and 90 days before you can make a claim.

After a claim is made and the benefits are being paid, if you were to create additional debt on your credit card, this will not be covered by the provider.

The good thing is if you took out the policy and had a change of mind you can usually cancel within the 14 – 30 day cooling off period.

Choosing Your Provider
You should make the most of your consumer power and choose a policy that fits in with your needs. Your credit card provider may try to sell you credit card protection insurance but you don’t have to take it.

In fact the Competition Commission is lobbying to make it illegal for credit companies to sell protection products within 14 days of selling credit products.

Simon Burgess, Managing Director of independent protection provider British Insurance comments ‘This is great news for consumers. They can now take time to shop around and evaluate their options’.

By obtaining quotes from other companies including independent providers, you may find that the savings on premiums are quite good.

Conclusion
Hopefully you can now see credit card protection insurance for what it is. It can provide you with much needed financial relief if you are out of work but you have to be careful and consider the terms and conditions to make sure the policy will work for you when you need it most.

Credit card protection insurance would provide a substantial sum towards the repayments of your credit card if you fell sick, suffered an accident or fell victim to involuntary redundancy. In any of these events a loss of income could leave you with a serious struggle on your hands to find the money to continue repaying your monthly credit card bills. With insurance behind you at least there would be a large portion of your credit card repayment repaid back to you each month for the term of the protection.

Your credit card protection insurance would begin to payout after the deferment period which is set out by the provider. It would then continue for the term they state in the small print of the cover and both of these would need checking before taking out your policy. If you should choose to take out your policy with independent payment protection specialist British Insurance, you would get your first payment once you have been unemployed or incapacitated for at least 30 days. You then receive an income each month for up to the 12th month before the policy ends. The policy would provide financial peace of mind which would allow you to concentrate on searching for another job or to make a recovery.

There are some providers that could offer 24 months of protection. Some could also state a deferment period of as long as 90 days. You would also have to check the exclusions as while British Insurance includes the most common, other providers could include many more. These would need checking to ensure that a policy would be suitable for your current lifestyle.
If you had nothing to fall onto if you lost your own income you could have to make drastic changes to your lifestyle to try and maintain the repayments of your credit card each month. If you fell behind on them the lender would expect you to catch up, but without a regular income this might be impossible. Missed payments or late repayments would mean they would be marked on your credit file. Your credit score is always taken into account when you apply for credit of any kind and a bad score could mean you would be turned down. When you take this into account you can see why taking out insurance for the repayments makes a great deal of sense.

You can compare credit card protection insurance against the other choices for servicing the repayments if you lose your income. You could risk turning to savings to get your through incapacity or unemployment. However you would not know how long you would have to turn to savings to meet your credit card repayments and your savings could deplete. Income received from the State might come nowhere near your own income and so could also let you down.