Les assurances de carte de crédit sont-elles nécessairesOctober 24, 2017

Credit Card Insurance - Is It Worth It

Credit card insurance is quite common. If you have applied for a new card recently, the card company probably asked you if you would like to add insurance. Some companies call it “insurance,” while others may use terms like “payment protection” or something similar.

There are different types of credit card insurance

Some insurance offers are specifically for death or disability. Usually termed “credit card life insurance” or “credit card disability insurance,” these programs will pay credit debt if you die or become disabled. This insurance will pay off the existing balance, but it will not cover any new charges.

The most common type of credit card insurance is involuntary unemployment credit card insurance. This is usually written with the acronym IUCC. This insurance will cover the payments on your credit card balance if you become unemployed. If you quit your job voluntarily, you will not be able to collect this insurance. You will usually be required to provide a record of employment so that you can prove your unemployment status.

The final type of insurance is credit property insurance. This insurance is for specific purchases made with your card. If the thing that you purchased is destroyed, you may be eligible to get your money back. This kind of insurance is usually only for “big ticket” items like electronics (tv, stereo system) or appliances. The insurance would cover specific incidents (fire, theft, natural disaster), but would not cover the loss if you caused the breakage (by dropping the tv, for example).

Is credit card insurance worth it?

Credit card insurance may be redundant. If you already have life insurance or disability insurance, you may not need more insurance from your card company. Also, homeowner or renter insurance may already cover your valuables in case of disaster.

UICC insurance falls into another category. If you have a large amount of debt, this kind of insurance could be a worthwhile investment. Insurance cost is typically 1% of your overall balance. If this is significantly less than the monthly minimum payment, then it could be a good safety net, especially if you are not certain about your job status in the future. If you are concerned about a job layoff, then perhaps you should purchase credit card insurance.

At the same time, if you are focused on paying off your debts, then UICC insurance will be an extra expense that will slow down the process.

Alternatives to insurance

An alternative option is to get an online personal loan to help cover your costs. These loans can be used to consolidate credit card debt or to make payments on your credit card accounts. These loans are easy to apply for. There is no credit check and the money is available in a matter of hours after you are approved. Online loans can be a great way to get funds quickly to cover any unexpected costs.

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