Credit card insurance
Credit card insurance is a great unknown within this financial product. Let’s learn more about them in this post.
Credit cards are increasingly used by users. We can see them present even in everyday purchases at the supermarket. In 2016 they even surpassed for the first time the use of cash in stores.
What many people do not know, is that these plastics are not only used to defer payments, but they have many other advantages. An example of the advantages that we can enjoy with the use of the cards, are all those free insurances linked to them. They can be very useful for the user, such as helping us in case we have an accident abroad, we want to cancel a trip, etc.
Below we are going to show you all the insurances that you can enjoy if you have a credit card, and the coverage they offer:
What are credit card insurances
Generally, the insurances that are in the cards do not suppose an added cost, since this one is included in the expenses that the own card generates.
What does vary depending on the product we contract and the bank to which it belongs, are the coverages. Thus, the most common cards will have less insurance or coverage. On the contrary, the more exclusive our plastic cards are, the more advantages we will be able to enjoy.
Whether a card is more common or more prestigious, the insurance included in it must be clearly reflected in the particular conditions of the contract we sign, without exception.
Credit card insurance coverages
As mentioned above, it is a mistake to believe that all credit cards offer the same amount of insurance. Each financial institution is responsible for proposing different offers, and for explaining the differences between them. Although it is true that there are advantages that all of them share, such as protection against theft, loss or accidents.
Most of the users who have a credit card are unaware of all the advantages they could benefit from someday. That is why we recommend that you read the contract carefully before signing it, because it should clearly and concisely list all the insurance policies linked to it, as well as their coverage.
The most common coverages included in credit cards are the following:
- Travel coverage: this insurance can be associated to reimbursements or bonuses in case of delay or cancellation of a flight, loss or damage of our luggage, as well as the possible cancellation of our trip. The essential condition to be able to make use of this insurance is that the trip in question has been paid for with the credit card. In addition, it is advisable to inquire about a traditional travel insurance. You may find it more complete, whatever your case may be.
- Travel insurance: your policy is very similar to the previous one. In this case, it is intended to cover accidents and illnesses of the policyholder, although it may also include the spouse or descendants. It may cover emergency expenses or medical transfers. You should know that, in this case, it is a type of insurance that must be added, since as a general rule it is only found in the cards with the highest level.
Life or death insurance
It is present in most credit cards, with the cardholder being the insured person, and whose main function is to protect the possible credit available on the card balance in the event of death. It can also be presented as a life insurance for the whole family, which, depending on the case, have quite high indemnities.
The policy of this type of insurance will remain in force as long as the ownership of the card is retained. If the cardholder dies, his immediate family members receive the indemnity stipulated in the contract.
Insurance against theft and fraud
It is one of the most demanded insurances by the users, and it is a reality that the credit cards are one of the banking products that more fraudulent problems entails for its holders.
For this reason, most of the banking entities offer this type of insurance, related to credit card theft and fraud. This insurance covers charges made without the cardholder’s permission, as well as the possible cloning of the card.
Purchase protection insurance
This type of insurance has been gaining importance in recent years. They cover inconveniences that may arise at the time of purchasing a product with a credit card. One of the most common cases is that a product purchased over the Internet is charged twice, or that the online order we place never arrives.
Coverage not usually included in credit card insurance policies
So far we have talked about those insurances that, as a general rule, are always included in credit cards. But there are many others that are not usually included, such as civil liability. They do not cover traffic accidents or claims that occurred before the card was taken out.
Also excluded are accidents that occur if the cardholder is under the influence of alcohol or other drugs, and also in the case of suicide or attempted suicide. Luggage loss or flight cancellation when the trip has not been made with the card, are also totally unprotected and are the responsibility of the cardholder.