What Is Credit Insurance on a Credit Card?
Credit insurance can bring peace of mind when you're concerned about paying bills during times of hardship. However, you should shop around for credit insurance to ensure that you're getting the best rates and optimum coverage.
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Types
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Life, disability, unemployment and property insurance are all offered via credit cards. Life and property will pay off a balance upon death or replace a damaged item. Unemployment and disability will make credit card payments for a time.
Benefits
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Credit insurance may benefit the under-insured and individuals concerned about keeping their job. Additionally, property insurance guarantees replacement or repair of items purchased with a credit card.
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Considerations
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Some credit insurance fees are placed directly to the balance on your credit card, resulting in interest payments on your insurance. You cannot be denied credit if you refuse credit insurance.
Warnings
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Credit insurance is sometimes offered to individuals who are not able to claim benefits. You may not be eligible to claim on life or unemployment insurance if you're of a certain age or not employed full time.
Taxes
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When you make a claim and receive funds from credit insurance, it is taxable if the amount received is more than what you paid in during a given year.
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References
Resources
- Photo Credit credit card and dollars image by Pavel Bernshtam from Fotolia.com
