Many credit card companies will try to get you to buy their life and disability insurance.
Having credit card life and disability insurance will result in your credit card payments being made by an insurance company to your credit card, should you be injured and unable to work, or should you die suddenly leaving your families with debts to pay. Read on for more information about credit card life and disability basics.
When you get credit card life and disability basics, you are paying a certain portion of your monthly credit card payment as an insurance premium. This premium goes toward a policy offered by an insurance company that contracts with your credit card company. In the event that you become disabled and unable to work, for instance, your credit card life and disability insurance will kick in, and the insurance company will pay your minimum monthly payment to the credit card company.
The cost of credit card life and disability insurance is usually not very expensive, and as a way to entice you into getting this insurance many credit card companies will offer a free introductory period of a few months or so. That free introductory time frame can vary, of course.
Many financial experts query the relevance and need of credit card life and disability insurance. It is essentially all about the credit card company making sure it gets paid, and the only thing paid is your monthly minimum — while that’s being paid your balance is still racking up interest amounts that are not covered by the insurance.
To learn more about credit card life and disability insurance basics, and whether you should get it or not, be sure to consult with a financial advisor. He or she will walk you through the pros and cons of credit card life and disability insurance, and why you might want to get it or not.