A Brief Guide on Credit Shield Facility on Credit Cards in UAE

A Brief Guide on Credit Shield Facility on Credit Cards in UAEPolicybazaarAverage Rating / 5 ( reviews)
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There are many credit card members in the UAE who have stressing on how to handle their rising balances. In such cases, the credit shield facilities (temporary protection policies available of the majority of credit cards) seem to offer some relaxation.

This scheme can be activated while applying for a credit card in UAE and claims to offer the card members security and peace of mind of knowing that they will be covered from outstanding balances on their credit card if they are unable to make the payment due to an unfortunate event.

Simply put, the insurance provider or bank will shell out the funds for making payment of the monthly card balance installments, if you are unable to afford them for reasons like company layoffs, closure of business, critical illness, and more (according to the terms and conditions of the card provider). However, unemployment or business closure must be involuntary.

Some of the credit card companies also cover the card payments monthly for a maximum of 12 months or till the time their customer is able to find a new job. Before moving ahead, let us first see what exactly is a credit shield?

It is an optional insurance facility or program for the credit cards provided by the financial institutions where the card dues of the cardholders are taken care of in the case of any unfortunate and unforeseen situations. It is important for the cardholders to have knowledge and understanding of options for credit shield as offered by their concerned banks. Usually, such valuable protection includes the following.

  1. Payment of the outstanding balance on your credit card in UAE in the case of demise, critical illness, and/or permanent total disability
  2. Assistance in making payment of the outstanding balance by providing a minimum installment scheme if the cardholder faces an involuntary loss of employment and/or temporary disability.

But all credit insurance schemes do not offer these same benefits. Here we have listed various options available the credit cards from renowned banks in the UAE.

Bank

Finance House

Insurance Company

Emirates Insurance Company

Cost

AED 11 or 0.85% of the outstanding balance (whichever higher)

Coverage

 

-Critical illness coverage up to AED 200,000

-Involuntary employment loss coverage of 10% of the amount outstanding/up to AED 5,000 monthly (for a maximum of 12 months).

-Permanent Disability coverage up to AED 200,000

-Loss of life coverage up to AED 200,000

-Involuntary employment loss coverage of 10% of the amount outstanding/up to AED 5,000 monthly (for a maximum of 12 months).

 

Bank

Citibank

Insurance Company

MetLife

Cost

0.82% of the outstanding balance

Coverage

-Critical illness covers 100% of the balance outstanding up to AED 350,000 payable as of the time of loss to the policyholder and an additional benefit of 3 times of the average balance outstanding for the previous 3 months card statement before or on the loss date is payable.

-Loss of life (sickness or accident) covers 100% of the balance outstanding up to AED 350,000 payable as of the time of loss to the policyholder and an additional benefit of 3 times of the average balance outstanding for the previous 3 months card statement before or on the loss date is payable to the legal heirs.

-Under involuntary employment loss, the maximum benefit per month must not be more than AED 1,000 & combined benefit payable must not be more than AED 35,000 for each insured monthly up to 12 monthly payments per ILOE claim.

 

Bank

Standard Chartered

Insurance Company

MetLife

Cost

0.3% of the outstanding balance

Coverage

-Loss of life (sickness or accident) covers 100% of the balance outstanding up to AED 350,000 and an additional benefit of 3 times the average balance outstanding is payable to the legal heirs.

-Critical illness covers 100% of the balance outstanding up to AED 350,000 after the 30 days waiting period and an additional benefit of 3 times of the average balance outstanding for the previous 3 months card statement before or on the loss date is payable to the insured’s beneficiary

-Total temporary disability (caused due to sickness or accident) covers 100% of the balance outstanding up to AED 350,000 after the 30 days waiting period.

- Permanent total disability (caused due to sickness or accident) includes a cover of 100% of the balance outstanding up to AED 350,000. The minimum consolidation duration of continuous 12 months of total disability before claiming a PTD. But in the event of irrevocable or total sight loss of eyes or disability by the severance or 2 or more limbs (above or at ankle or wrist), the 12 months’ consolidation period is waived off.

-Involuntary employment loss covers 10% of the balance outstanding for every 30 days of proven unemployment after the 30 days waiting period. Additionally, it includes a flat AED 2,000 benefit monthly for every 30 days duration with proven unemployment for a maximum of the first 6 months after the waiting period. The combined benefit cannot exceed AED 10,000 monthly.

  

Bank

Emirates NBD

Insurance Company

Abu Dhabi National Insurance Company

Cost

0.80% of the outstanding balance

Coverage

-Loss of life (due to any reason) includes an amount equivalent to the outstanding balance (up to AED 100,000 on the primary credit card in UAE and AED 300,000 on Emirates NBD credit card) of the previous month’s last calendar day from the date of claim payable to the legal heirs.

-Critical illness cover includes an amount equivalent to the outstanding balance (up to AED 100,000 on primary credit card and AED 300,000 on Emirates NBD credit card) of the previous month’s last calendar day from the date of claim payable to the insured on being diagnosed with 1 or more critical ailment.

-Permanent total disability (caused due to sickness or accident) includes an amount equivalent to the outstanding balance (up to AED 100,000 on primary credit card and AED 300,000 on Emirates NBD credit card) of the previous month’s last calendar day from the date of claim payable to the insured.

*The costs on each credit card in UAE are subject to changes as per the discretion of the credit card company.

One common thing amongst banks is enrolling the card members in these credit shield schemes. Therefore, it is suggested that to make sure to check this out while applying

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