A credit card is a powerful financial tool that enables a cardholder to enjoy great spending power and benefits. But credit cards also carry their own perils. For example, missing a bill payment can attract huge penalties in the form of late fees and interest. The unpredictability of life further compounds the risk of missing credit card repayments. Even the best of credit cardholders may face huge financial strain due to unforeseen events and accidents. Luckily, there exists an extremely useful credit card facility known as credit shield that can act as a blessing in disguise during unpredictable times.
What is Credit Shield?
Credit shield is credit card insurance that provides coverage to the credit cardholder. Most credit cards offers credit shield as an add-on service for cardholders while some credit cards automatically register the card member for credit shield, with the possibility of opting out at any time. Credit shield is an invaluable feature which secures credit card spending and waives outstanding payments for the card in covered cases.
What is Covered?
Bear in mind that credit shield coverage varies from credit card issuer to issuer. These are some of the incredible covers that a comprehensive credit shield policy offers to credit card owners:
In the event of accidental death of the insured credit card holder; the outstanding credit card payments are waived off.
2. Temporary Total Disability
This cover is typically offered only to self-employed credit card It provides insurance coverage in case the credit card member suffers a temporary disability due to an accident, which makes them unable to perform their organizational duties.
3. Permanent Total Disability
The credit card member is also liable to receive benefits of the credit shield policy if they become permanently disabled due to an accident.
4. Critical Illnesses
Cardholders diagnosed with critical illnesses are also covered under most credit shield policies. The full range of critical illnesses may differ depending upon the credit card issuer’s policy.
Certain credit shield policies also offer daily waivers on outstanding credit card payments in the event that the cardholder is hospitalized due to an accident or an illness.
6. Involuntary Loss of Employment
In case the sudden loss of credit card holder income, they can’t make their credit card Most credit shield policies cover the involuntary loss of employment of the credit card holder.
Note: Credit shield policies come with terms and conditions based on the credit card holder’s age, caps on maximum waiver amounts and elapsed time since the date of the accident.
Credit Shield Policies by Bank
The details of various credit shield policies offered by some of the most popular credit card providers in UAE are mentioned below.
|Bank Name||Name of Policy||What is Covered||Cost|
|Emirates NBD||Credit Shield Insurance||Permanent Total Disability, Critical Illness, and Death||0.99% of the outstanding balance|
|First Gulf Bank (FGB)||Credit Shield Insurance||Temporary Total Disability,Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,Hospitalization,and Death||1.04% of the outstanding balance|
|Abu Dhabi Commercial Bank (ADCB)||Islamic Credit Card Shield (Takaful)||Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,and Death||1.0395% of the outstanding balance|
|Rakbank||Credit Shield Insurance||Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,and Death||0.99% of the outstanding balance|
|Citibank||Life Style Protect||Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,and Death||0.79% of the outstanding balance|
|Mashreq||Credit Shield||Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,Hospitalization,and Death||0.89% of the outstanding balance|
|Emirates Islamic||Credit Shield||Permanent Total Disability,Involuntary Loss of Employment,and Death||0.99% of the outstanding balance|
|HSBC||Credit Shield Plus||Temporary Total Disability,Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,and Death||0.625% of the outstanding balance|
|Dubai Islamic Bank||Credit Shield Takaful||Permanent Total Disability,Involuntary Loss of Employment,and Death||0.89% of the outstanding balance|
|Commercial Bank of Dubai (CBD)||Credit Shield||Permanent Total Disability,Involuntary Loss of Employment,Critical Illness,and Death||0.89% of the outstanding balance|
* (Updated as of Feb 2019)
Advantages of Credit Shield
When it comes to unexpected accidents and illnesses, credit shield is a credit card holder’s best friend. Here are the advantages of credit shield:
- The insurance provides credit card holders with peace of mind, allowing them to live peacefully.
- A credit shield policy shares the credit card owner’s financial burden during times of distress by waiving off large chunks of the outstanding payment.
- With prices as low as 0.625% of the outstanding balance, credit shield insurance is an extremely low-cost credit card
When and How to Make a Credit Shield Claim?
In the event of covered accident or illness, credit card holders must immediately inform their credit card provider and request for the appropriate credit shield claim form.
As most credit card issuers will not accept claims that are more than three months old, cardholders are advised to get in touch with their bank representative as soon as possible.
Over to You
Kindly refer to your credit card policy document for further information on credit shield restrictions, caps, timelines and claim submission procedures.