Credit card protection insurance can prove invaluable if you suddenly find yourself without an income due to due involuntary redundancy, accident or prolonged illness. In the event that one of these things happens, this insurance will help you towards maintaining your credit card repayments by providing a tax free amount every month until you are back on your feet.

How does it work?

A credit card protection insurance policy will kick in typically anywhere from 30-90 days after the covered event happens, depending on the individual policy terms and conditions. It will then run for up to twelve to twenty four months, or until you are back to work, whichever happens sooner.

A percentage of your outstanding credit card balance will be covered by the credit card protection insurance and this will be the monthly amount you will receive as a tax free benefit in the event of a claim.

Why would you need it?

With the economy currently in a downturn, more and more people are finding it difficult to cope financially and one of the first things they will stop paying is credit commitments such as a credit card bill. In fact, research from financial comparison site Money Expert last year highlighted that in the period March – September 2008, around four million credit card users had missed a payment.

The knock on effect of these missed payments can include extra interest charges; fees for non-payment of the monthly instalment (both of which can rack up extra debt on top of the existing balance); and a negative mark on your credit file which can affect your future changes of getting credit.

With credit card protection insurance, you would not face these problems and would also feel a lot less stressed knowing that your credit card repayments were being kept up to date.

Considerations when buying cover

Now that the benefits of credit card insurance have been highlighted, it is also important knowing the best place to get your protection. You would have been offered the insurance at the time that you applied for the card. However, taken this way it can often work out very expensive. The good news is that you can shop around for your cover just as you would for anything else, and the one of the best places to go is via a standalone provider such as the ethical British Insurance.

Independent providers of credit card protection insurance can often offer a low cost way to protect your credit card repayments, often with additional benefits not always found with high street policies. This means that you can get the cover you need, without breaking the bank.

Even though many of us do our best to keep our finances balanced and to save up for the things we would otherwise not be able to afford, occasionally only the credit card will do. Unexpected expenditure can sometimes rear its head and put a strain on your bank balance, and this can be when the time comes to use the plastic. Careful monitoring can often ensure that you do not fall behind with your payments and get the debt cleared. But no one can predict what will happen in future and this means there is always the chance you will suddenly find yourself unable to keep up with the statements. Failure to meet minimum payment amounts quickly leads to a struggle with a credit card company. Then in turn this can lead to problems with your credit rating and even the possibility of your case being referred to a debt collection agency. All of this can add extra stress when you have lost your income through an unfortunate event like suffering an injury from an accident. credit card protection insurance can help take away this worry in that it will keep up with card repayments even when you are out of action through no fault of your own.

This type of financial insurance will cover the policyholder if they are stripped of their income through illness or injury from an accident or through being made redundant involuntarily. Subject to a successful claim, it will pay back a percentage of someone’s outstanding credit card balance for each month they are without an income through no fault of their own. The length of time this will continue for depends on the insurer, although all will stop the payouts when someone returns to work. Typically, you can expect a provider to pay out for a few months all the way up to 24 months.

To qualify, someone will usually need to have held a job for a set period - often about six months is the usual minimum limit. A policy must be for the named card holder and be taken out by them. The person in question must be a UK resident. Common exclusions are that payments will not be made if someone loses their income due to a pre-existing medical condition diagnosed before the policy was purchased.

The person taking out the credit card protection insurance will normally be able to decide what percentage of their outstanding balance they would like to have covered. An insurer will normally payout a regular figure - say 10 per cent of the outstanding balance - for every month that someone is without their income.

Cost-wise, credit card protection insurance premiums are either charged in a lump sum or vary depending on the level of credit card debt someone carries from one month the next. Many credit card companies offer their own forms of cover with their cards but a consumer could save cash by taking out a policy with independent firms such as protection specialists British Insurance.

Credit card protection insurance can be great for providing peace of mind that you would not fall behind on the repayments if you lose your income to incapacity or unemployment. You protect a percentage of the monthly outstanding balance on your card and then claim this sum back if you become a victim to one of the events insured against.

The income you received back from the policy would then go towards your repayments which means you are not left struggling to find the whole sum. If you were to fall behind on the repayments the first thing to be affected would be your credit score. As this is what all lenders take into account when approving your application for credit you could be turned down. If you managed to get approval you would most likely have to pay out a higher rate of interest.

When you take the credit card with the lender they will usually offer you credit card protection insurance but in the majority of cases this will be the most expensive way of taking cover. You are able to get a policy a lot cheaper if you choose an independent payment protection specialist and compare quotes. If you search online one of the cheapest quotes will be with leading payment protection specialist British Insurance. Along with savings they offer no excess as they back date the benefit to the first day of unemployment or incapacity. You could make a claim from the 30th day and then continue to claim each month for up to 24 months.

When comparing other providers you would have to check the small print as some providers could payout for up to 12 months only on their policy. You also have to find out when you can claim as some policies will state a deferment period of up to 90 days in the conditions. You also need to check the exclusions that providers add in. Some will add in many while ethical payment protection specialists British Insurance add in just the most common ones. They also provide you with the information that you need to determine if the protection would be suitable. This information must be checked against your lifestyle so that you know you would be eligible to put in a claim.

Credit card protection insurance provides you with a safety net that is more reliable than risking using savings. Savings could run dry before you had found work or had the chance to make a recovery and this would leave you struggling to find the money. It is also better than risking being able to claim benefits from the State as many times you do not get the income you expect if you are eligible.

It seems as if almost everyone has a credit card or two these days. You have to admit they are handy and convenient little devices. All you have to do is swipe it at the till or for the more sophisticated systems, just enter your pin and take all your goodies home. There is no need to carry cash or bulky coins and when the bill comes just pay your instalment each month. However, have you ever considered what you would do if you were unable to pay the monthly bill? If this is a concern then credit card protection insurance could be for you.

Credit card protection insurance is a type of cover that will pay towards your credit card bills if you were to die or if you are unable to work due to an involuntary reason namely accident, sickness (terminal or otherwise) and redundancy.

Features

Although the rules will differ from provider to provider, here are the main features of the insurance:

In order to make a claim you must be unemployed for a minimum period which is often specified by the provider. If you are in seasonal employment however, you will not be covered.

Other eligibility rules apply such as you must be at least 18 years old and permanently resident in the UK.

In the cases of accident, sickness and involuntary unemployment a set percentage of your monthly credit card payments will be repaid.

The main benefit of this insurance is the peace of mind you will have. If any of the mentioned events were to happen to you, you can rest assured that your monthly bills will be catered for and creditors won’t be chasing you.

Before you choose your product, read the terms and conditions carefully to see what exclusions exist. Be sure to assess your circumstances accurately then see if the policy suits your needs.

Purchasing Your Policy

Although credit card providers will try to add on the insurance to your policy, you can always look at independent providers to see if you can obtain a cheaper quote and probably cover more than one card for the same premium. Companies such as ethical provider British Insurance have been known to offer protection products at much lower premiums than their competitors.

Summary

When you think of how many things could go wrong and how easy it is to lose a regular income, taking out credit card protection insurance seems like a very sensible thing to do. If the worse were to happen, you won’t have to stress out about keeping up your credit card payments because they will be taken care of.

When money is not so tight and you can pay a reasonable amount of your outstanding balance off each month, a credit card can seem like not such a threatening debt. It simply sits in your wallet or purse as an emergency or method for paying for something you would otherwise never be able to afford. Indeed, a card is a useful financial tool and even a sensible thing to have in the right circumstances. However, not everyone thinks carefully about how they would handle it if they suddenly lost their income. Being sacked from a job is wholly avoidable in most cases, but what if someone fell ill, was in an accident and was injured, or was made redundant involuntarily? Then a card debt can suddenly become a serious headache. For this reason insurance companies offer what is known as credit card protection insurance.

The idea of this type of cover is to help you to pay off part of your outstanding balance every month if you are suddenly stripped of your income through no fault of your own. Failing to pay means, firstly, bad news for your credit rating, and secondly, the threat of legal action and even repossession of your property. In exchange for a small premium, credit card protection will help take this type of concern away if the worst happens.

The first thing someone must do is decide what percentage of their outstanding balance they want covered. Premiums usually relate to the size of the debt and the percentage of cover. So, if someone has a debt of £2,000, and covers 10 per cent of this outstanding balance, they can usually expect a higher premium than someone with a balance of £1,000 pounds and coverage of 10 per cent of this. To give an example of how cover works, the person with the latter type of policy would typically have 10 per cent or £100 of their balance paid by their insurer after the first month of a successful claim following the loss of their income.

Some typical restrictions and exclusions apply. For example, most people will not be able to claim if they are laid up due to a pre-existing illness which they were diagnosed with before they took out the cover. Illness or injury which occurs as a result of drug or alcohol abuse or self harm will also not normally be covered. When it comes to redundancy, cover will only be provided if you did not know you were going to be let go at the time you took out the insurance.

Some people may have already encountered forms of credit card insurance without even realising it. A card provider may have asked them if they want to protect their plastic with a policy. This is known as selling cover at ‘point of sale’, and can be poor value when compared to some standalone firms who do not sell insurance in tandem with loans. One example is standalone payment protection specialists British Insurance, which offer just this type of independent credit card protection insurance.

Having something to fall back on if you suffered from an accident or an illness or if you were to become a victim of redundancy would be a lifeline. When it comes to the repayments of your credit card then you could consider taking out credit card protection insurance. The protection is usually offered to you when applying for the credit card but in the majority of cases you would be able to get the cover cheaper if you opted to buy it independently. There are specialists who offer payment protection and nothing but and as such they will provide you with all the information relating to the protection so that you would know if cover was suitable.

You would insure up to a certain amount, which is defined by the provider, of the balance outstanding with a specialist provider and this would be the sum of money that you would be given back each month for the term of the policy if you needed to claim. This sum of money would go towards you being able to maintain your payment, keep you out of debt and help you to maintain your credit rating.

If you get behind on repayments then the first thing to be affected would be your credit rating and this would mean it could be hard to obtain any type of credit in the future. Your credit rating would also take a lot longer to repair than it did to destroy it and this means you could be turned down for a long time to come. If you did get a lender willing to take a risk on you, you might have to pay a high rate of interest for the loan. You would also have to make an agreement to payoff the borrowing over time and life could become very difficult at a time when you least need it. With credit card protection insurance behind you it would provide you with peace of mind that would allow you time to search for work or if incapacitated to make a recovery.

Standalone payment protection specialists British Insurance offer one of the cheapest premiums for credit card protection insurance. They would payout on the cover from the 30th day of your becoming unemployed or from being incapacitated and would then continue paying your income for up to the 12th month. If you wanted to shop around and compare quotes then you would also have to compare the small print as some providers could offer to payout for up to 24 months. you would also have to check to find out when you would be able to put in your claim as with some providers this could be as long as the 90th day of being unemployed or incapacitated. You would also need to find out what exclusions are in the cover as all providers will add in some with some putting in more than others. If you take cover from British Insurance the exclusions will be on their website so you can check them against your circumstance before going ahead and taking on the protection.

Credit card protection insurance is one way of ensuring that if you lose your income as a result of being unemployed or incapacitated you would be able to continue meeting the demands of your repayments. The policy would protect against accident, illness or redundancy and if you choose to take it with an ethical payment protection specialist you would save money on the premiums.

You take out credit card protection insurance by insuring up to a pre-agreed amount of the balance each month and then this is amount is paid back to you, tax-free each month you remained unemployed or incapacitated up to the term of the policy. This sum of money would go towards you being able to meet you repayments and not have to worry about the consequences of falling in to arrears. If you did miss payments the first thing to be affected would be your credit rating. This is what all lenders will look at when they decide to approve your application for credit of any kind. If you have a bad rating then it is likely that they will not approve your application or you would have to pay a high rate of interest for the loan or credit card. Along with this of course you would still be in debt with the lender and have to come to an agreement by which to pay off what you owe over time. Your policy would prevent any of these worries.

Taking out payment protection insurance with an ethical standalone provider is one of the best ways to ensure that you do not have to pay over the odds for the cover. Taking the protection that the lender will offer when they give you the card means that you will be paying towards the £4 billion profits they make from adding in cover with their credit card and loans. A standalone provider would give you a quote that would be based on your age when applying and the amount that you wish to protect. If you choose British Insurance as your provider you would get one of the cheapest possible quotes and a quality product.

British Insurance would begin paying out on the credit card protection insurance once you have been unemployed or incapacitated for a period of 30 days consecutively. They back date their cover to the first day of you being unemployed or incapacitated and would then continue to pay to provide you with an income that would payout for up to the 12th month if you were to remain unemployed or incapacitated. If you searched with other providers then you would need to check the terms of their protection as some might state that you would have to be unemployed or unable to work for 90 days before you could make a claim. The same would apply to how long the provider would payout on the protection as some can extend this for up to 24 months.  When you are checking the terms and conditions you also need to look into the exclusions as there are some to be found in all payment protection plans. Some providers add in just the most frequently found exclusions while others could add in many.

You can cover the repayments of credit cards by taking out credit card protection insurance. This policy - as the name would suggest - covers the repayments of your credit card, or a percentage of the outstanding balance  you have to make each month. The protection is sometimes offered when you take out the credit card with the lender on the high street and it can also be taken with an independent payment protection provider. If you choose to shop around and buy the protection independently you are able to get the protection a lot cheaper than you would by having it added in by the lender.

British Insurance would supply you with credit card protection insurance with premiums that are age based and also based on the amount that you wish to protect each month. The cover is taken out by you insuring up to so much of your repayment each month which is pre-agreed when taking out the cover and this is the sum of income that you would receive back from the policy. You would be able to claim if you lost your income after suffering an accident an illness or if you were to become unemployed as the result of being made redundant.

When looking around for the cheapest premiums British Insurance offers one of the cheapest. They would help you to save as much as 80% and offer protection that is of quality and comes with information regarding the exclusions. These have to be checked against your circumstances if you want to be sure that you would be eligible to make a claim.  Once you have checked this you would have a safety net to fall back on if and when you needed it.

British Insurance would begin to payout on the credit card protection insurance once you had been incapacitated or unemployed for at least 30 days. They would pay back on the protection to day one of you being made unemployed or from being incapacitated and then you would receive an income each month you continued to remain unemployed or unable to work up to 12 months.  During this period of time you would not have to worry about where you would get the money from to continue meeting the commitments of your credit cards which would leave you free to search for work or to make a recovery. After this period of time the policy would then cease regardless of whether you had recovered or had found work again. If you look around with other providers you could find that they might payout on the protection for up to 24 months and some might not payout on the benefit until the 90th day of you being unemployed or incapacitated.

By choosing to take out credit card protection insurance independently you can save as much as 40% on the cost of protection if you get your quote from independent payment protection specialist British Insurance. Along with the savings they will provide you with information about exclusions which have to be checked against your circumstances and provide you with a quality policy.

Credit card protection insurance is available as loan payment protection and works by the policyholder insuring a portion of their repayments which is agree upon at the time of taking out the policy. This is the sum of money that would be given back tax-free if you should fall ill, suffer an illness or become unemployed as the result of redundancy. This sum of money would then go a long way towards you being able to keep up with your repayments and keep you out of debt.

If you were to get behind on payments then your credit rating would be affected and this could make borrowing in the future extremely difficult. It can also take a long time to repair your credit rating and during this time you might have to pay a higher rate of interest even if you are approved for credit. A small premium each month would help you to stop any of this happening.

There would be a period of time you would have to wait before you would be able to claim on the cover. This would usually be between the 30th and the 90th day of you being unemployed or incapacitated. The cover would also only payout for so many months before it would cease and this can be either a period of 12 months or 24 months. If you take protection from ethical British Insurance you would receive a payment each month for 12 months after you had been unemployed by redundancy or unable to work due to accident or sickness for at least 30 days. They would also back pay on the protection to the first day of you becoming unemployed or suffering accident or illness.

Credit card protection insurance is a much better way of protecting your repayments than relying on falling back on savings as a means of being able to continue with your repayments. for one when relying on savings you would not know how long you would have to use them as you could be unable to work for many months and it could also be many months before you were fit enough to return to work. If you are considering applying for benefit from the State to help you out during your unemployment or incapacity then you could be shocked by the little you might be entitled to receive. This income would also have to help you to pay other bills and put food on the table for the family also.

Missing payment on credit card outgoings can make your life a misery. Your credit rating would be in tatters, you would be in debt that keeps mounting up and of course you would have to find a way to pay the lender back the money you owe. While in work this scenario seems a million miles away but if you lost your income suddenly after falling ill or suffering an accident which would leave you unfit for work it could be a possibility. You could also lose your income after becoming unemployed by such as redundancy and be left struggling to meet your repayments. However if you had taken out credit card protection insurance then you would have something to rely on financially.

You could take out credit card protection insurance by insuring a fixed amount of your repayments each month and this income would be paid back to you by way of a payment each month. It would go towards you being able to keep the repayments going and would ease your financial worries regarding your payments. Cover is offered when taking out the credit card with the lender, however this is the most expensive way of taking out protection and you can get it cheaper. Standalone specialists who offer payment protection products will offer cheaper premiums.

Ethical independent provider British Insurance offer savings of up to 80% for premiums for protection. They would also present you with the information needed so that you can check for suitability of the policy. You would have to be aware of the exclusions that exist in the protection and ensure you check them. Providing you have done this you can then make you application online for protection using the form provided on the company’s website.

Credit card protection insurance taken with ethical provider British Insurance begin to payout an income which would be tax-free after you had reached the 30th continuous day of being unemployed or incapacitated. It would also be back paid to day one of your unemployment or from being unfit for work and would continue providing you with an income for 12 months if necessary. Other providers might offer different terms on their insurance. Some providers could payout for up to 24 months and some might state that you need to continually unemployed or unfit for work for anything up to the 90th day before you might be able to put a claim in on the protection. Therefore when shopping around for cover it is essential to check exclusions, cost and when and for how long the protection would pay out.