If you are considering taking advantage of an offer for credit card life insurance, make sure that you completely understand exactly what types of benefits they are offering and how much the payment will be. Many types of policies are called credit card life insurance, but the terms can include a wide variety of circumstances. Each offer may be different, so it's important to keep in mind that they all have to be researched thoroughly to make sure that you are not buying the wrong type of policy.
When you use your credit card to make travel arrangements,credit card life insurance is often offered. In most cases, this is a very limited type of life insurance. The exact terms of coverage that is offered may offer coverage only on specific causes of death. For instance, some policies will only cover instances of death that occur while you are participating in an activity that you have paid for on your credit card. Others will cover only an accidental death, and if you die of natural causes the credit card life insurance won't pay off.
Details to Consider
The death benefit can also be different from policy to policy. Many times the value of the credit card life insurance is only payable to cover the balance on the debt to the issuing company. If you are in the habit of paying the balance of your credit card in full each month, you may be paying a premium for insurance that will never be of any value except for the amount that may have built up during the billing cycle.
If you carry a large balance, you may think that it is a good idea to buy the credit card life insurance even if the benefit can only be used to pay off the specific account, but again, ask questions before you pay a premium. If you are married and the account is a joint account in both your name and that of your spouse, the survivor may still be responsible for the balance and the premiums that have been paid in will have been money down the drain.
In some cases it's possible to get a true term life insurance policy through the company that issues your favorite credit card, but it is up to you to do the research and make sure that you know what type of credit card life insurance that you are considering.
If you are able to identify a true policy through the company you use, you may find that you are able to purchase the policy without a health exam. This can be a big benefit if you have any type of health problem that puts you in the high risk category. High risk insurance is expensive when it is purchased through an agent or broker and any chance that you have to obtain the coverage without answering health questions or submitting to a medical exam by a doctor could save you money. Group policies, like credit card life insurance policies, may be a solution to making sure that your family is provided for in the event of the end of your life.
Many times affiliates of lenders of any kind will include offers for other companies in the materials that they mail out to their customers. These life policies are not actually issued by the lender; rather they are issued by the affiliated company. They are regular policies that you can get whether you are associated with the lender or not. In many cases, you are offered a limited time discounted offer because you hold the credit card, but it's important to know that you will be dealing with another company.
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