Credit card lenders do whatever is necessary to avoid financial losses. One way they do this is by including different types of insurance policies with their credit card accounts. Most credit card holders are not even aware of these insurances even though they are probably paying for them. With that said, most cardholders would probably agree to pay for the insurance policies if they thought it would pay their balances in full when they died. Below, you will discover more information about life insurance and credit card companies.
The Lender Is The Beneficiary
The insurance included with credit cards has a beneficiary just like other types of life insurance policies. The kicker is the beneficiary is most often the lender. So, when the cardholder is declared deceased, the insurance company will make the check out to the lender. This is good and all but the cardholder’s family doesn’t get any of the money. However, they are left owing nothing on the cardholder’s account.
Credit Life Insurance
If your credit card does not come with life insurance, you should consider changing credit card companies. The best OCBC credit card to pay insurance is available to all qualified consumers. Credit life insurance is very similar to mortgage insurance. This type of insurance covers the insured person’s loan payments when they are declared deceased. The great benefit of this life insurance is the monthly premiums never increase no matter the balance.
Credit Card Insurance
Credit card insurance is slightly different than credit life insurance. It only covers the minimum monthly premium. It is up to the insured person’s family to cover the principal balance. Once a cardholder agrees to credit life insurance, they will find it very difficult to cancel it later on. And, many cases the credit card company will not agree to let the cardholder cancel the coverage even if they request it. So, be sure to do your research before you agree to credit card insurance.
Credit Disability Insurance
Credit card companies are forced to deal with customers who are constantly missing their monthly payments. One of the most common reasons why cardholders falter on their monthly payments is job loss. Fortunately, there are insurance policies that will cover the monthly payment. One such coverage is known as credit disability insurance. However, this type of insurance has limitations. It only covers the minimum payment and in cases where the cardholder has lost employment due to a disability. The monthly premium is the responsibility of the cardholder.
Summary
If you want to keep your family from having to pay your credit card balances after your death, you should definitely agree to pay for some type of credit life insurance. However, you should only agree to do so after you know the facts. If necessary, you can contact the insurance company directly instead of just relying on what the credit card lender has to say. Lenders are definitely keen on selling these policies to their customers because they protect them from financial loss in the event the cardholder dies owing a balance.
