Credit Card Insurance: Choosing What Is Important
Everyone
has been exposed to those monthly credit card statements
that include a variety of inserts for many different offers.
On top of that, the credit card issuer has a tendency to
call frequently offering you some new insurance program that
is “free” for the first thirty days, but you have to sign up
right then. The difficult part is that there are so many
different offers that they will try to sell you, it’s hard
to decide what’s important and what isn’t. Review the
possibilities and decide what you really need before you
decide to buy any kind of credit card insurance.
Disability Insurance
Depending on the company for whom you work, this may or may
not be a priority item for you. With disability insurance,
if you are ill or injured and cannot work for at least
thirty days, the minimum payments on your credit card will
be covered if you are up to date with the payments and not
over your credit limit. If your company pays your salary
while you are ill, or within a reasonable percentage, you
may not need this insurance, but you want to look at it from
a long-term perspective before you decide such as
considering how long your company will pay you for your
illness. The disadvantage with this insurance is that if
your credit cards are nearing their credit limit, the
minimum payments covered by the insurance are not going to
reduce your balance, and may in essence eventually cause you
to exceed your credit limit because of the interest.
Life Insurance
If you don’t take any of the other insurance that is
offered, you should definitely put this one on your priority
list. If you should die, the insurance will cover the
balance on your bill as long as it’s up to date and not over
your credit limit. This saves your family from losing money
out of the proceeds of your estate because of bills that
need paid. You may feel it can’t hurt your credit when
you’re gone, but it will hurt your family by reducing the
amount of available funds from your estate. Without
insurance, your creditors will attach a lien to your estate
that will have to be paid before your survivors receive any
of their inheritance money. In order to protect your family
from undue stress and financial hardship, insure the
balances on your credit cards.
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