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Credit card insurance is beneficial in a lot of cases and allows user to safeguard their outstanding financial obligations in case of uncertain situations. If you are planning to get a credit card along with credit card insurance this quick read will help you to understand the utility and benefits in a simpler and better way. We will shed light on all pros and cons of credit card insurance along with important points to ponder when getting payment protection insurance.
Credit card insurance commonly known as payment protection insurance is a type of insurance plan that is designed and developed in order to protect payments associated with a particular card account or a specific loan. The credit card insurance will protect the outstanding payments by paying financial obligations in case the card owner is unable to do so.
When your credit card provider calls you or sends you emails regarding credit insurance, or maybe a balance protection plan this is an indicator that your provider is working in integration with an insurance provider. As a result of this integration, customers can receive a special package that will safeguard their outstanding payments.
Credit card insurances are mainly classified into four categories, as follows-
A lot of credit card users are stuck in the dilemma of whether they need credit card insurance. It is important for credit card users to analyze their current and future financial needs before purchasing credit card insurance in the UAE. If you already have suitable insurance coverage in places such as life insurance and disability coverage you would have value to cover your outstanding credit card payments and purchasing credit card insurance will only add to the expenses.
However, contrary to the first if you do not have enough insurance coverage already in place to cover your outstanding financial obligations, you should consider getting credit card insurance to protect your payments.
It is crucial for insurance seekers to be aware of the fact that credit card insurance is not as flexible as life insurance and disability plans. For instance, if you have several credit cards you can choose to get multiple credit card insurances which would roughly be equivalent to the value of a conventional life insurance policy with which not only your outstanding financial obligations will be paid, but your loved ones will also receive a death benefit.
There are several important points to ponder before getting credit card insurance, here’s a quick rundown-
In a Nutshell
Credit card insurance aka payment protection insurance is not an absolute must and therefore one must not feel forced to purchase it. Credit card insurance has limited utility and _is only beneficial in case of credit card use. On the other hand, conventional insurance products are not limited to providing coverage in case of particular scenarios, they offer death benefit along with providing coverage for outstanding obligations. Insurance seekers should revisit their needs and budget thoroughly before purchasing credit card insurance.