Credit Protection – Not Always Such A Good Deal

With all the job uncertainty out there, credit card companies are selling more of their “credit protection insurance” to cardholders. The big sell these days is that your card payments will be made if you are out of work. Sounds great, until you read the fine print.

In most cases, the unemployment coverage doesn’t kick in if you voluntarily leave your job or are let go for performance reasons. And just having your hours scaled back won’t trigger coverage either.

In addition, these policies are very costly, ranging from 35 to 99 cents for every $100 of balance on your card each month. So, if you are carrying a $3000 balance on your card you would pay between $10.50 and $30 a month for this protection. In most cases, you would be much better off applying this money to your outstanding balance.

There are those that might argue that at least this is good coverage if you die or become disabled. Again, the fine print might make you change your mind. In most cases the definition of disabled means that you are unable to do any work of any kind. That’s a recipe for never having to pay a claim if you ask me. The standard disability policy will provide coverage if you are unable to do the job that you were doing when you became disabled. At any rate, the cost per $1000 of protection is between 5 and 10 times what you would pay an insurance company for life insurance or disability insurance.

It’s clear that these credit protection plans require the buyer to read the fine print very carefully. They are probably only a good deal for those that are uninsurable due to medical conditions. My advice is to purchase your disability insurance and your life insurance from a company that is in that business instead of from your credit card company.

At Clinard Insurance Group, in Winston Salem, NC, we want all consumers to be informed consumers. If you have any questions about your own life insurance or disability insurance needs, or if you need help with your auto insurance, home insurance or business insurance, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com.

The source information for this article was taken from www.insuranceanswerguy.com