You may think that credit card payment protection insurance is just another unnecessary product that you will never need. However, you may actually be confused as to what credit card protection insurance is. For the purpose of this article we are talking the insurance that protects the repayments on your credit card in the vent of job loss or loss of income due to accident to sickness.
We are not talking about the type of insurance that protects your card in the event it is lost or stolen.
Maybe you were unaware that you could protect the repayments on your credit card? Certainly, it is an exciting concept, that even if you were made redundant or were off work due to accident or sickness, you would still be able to comfortably service your debts.
Because that is what credit card payment protection insurance does – it will pay you a pre-agreed amount (typically a percentage of your credit card balance) every month for 12-24 months until you are back to work again. This means no late or non-payment fees on your credit card, nor demands for unpaid instalments from the credit card provider.
The insurance will take away at least some of the financial worry that you will undoubtedly have at such an awful time.
So where to buy your credit card protection insurance?
You will be offered the credit card cover at the same time as you take out your credit card. However, this could well be the most expensive way of getting this protection. For the High Street banks and lenders, credit card insurance can be an easy way to make huge commissions. On the other hand, standalone providers historically offer the cover at much lower prices. One such specialist provider is British Insurance who can offer savings of up to 80% compared to the traditional credit card insurance providers.
What to look out for when buying your cover?
Apart from the price, check out the features and benefits of the cover. Look at the exclusions in particular to check that you would be eligible to take out a policy and claim. Typically, unemployment benefits will not be paid in the case of misconduct which contributes or leads to your dismissal nor resignation, voluntary unemployment or voluntary redundancy. And if your employment is seasonal or casual you will not be able to claim on your credit card payment protection policy.
Look to see when you are able to make a claim from as this varies among the different policy providers. It is usually anywhere from 30 to 90 days after the first day you are out of work or ill. Some providers - like British Insurance – backdate your claim to day one, meaning you don’t lose out financially.
So, now you know what credit card payment protection insurance is.
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