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Credit card issuers often send out offers for insurance policies that can be added to their cards. There are several different types of insurance and card holders can be confused by the various options.
Many wonder whether or not this option is worth the cost.
The cardholder needs to examine what exactly is being offered anytime their card company sends a flyer or promotional offer.
Here are a few of the types of insurance a credit card may offer.
- Life insurance: pays your balance in the event of your death if the card company is named as beneficiary.
- Disability: pays the minimum payment for a set period of time should the card holder becomes medically disabled. (Purchases made after the disability are not covered.)
- Involuntary unemployment: pays the minimum payment for a specific period of time if the card holder becomes unemployed through lay-offs or downsizing.
- Property insurance: pays for items purchased on the card if they are lost, stolen or become damaged.
Regardless of which type you are considering, be sure to check out all the details before signing up. Be sure you know the exact cost of the policy.
Find out if there is a period of time you will have to wait before benefits are paid. Also, think about whether you really need an additional policy before you buy it.