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Insurance Credit Cards

An alternative to investing in separate insurance policies and paying hefty premiums is applying for an insurance credit card. These cards cover a range of insurance benefits such as travel insurance, medical insurance, insurance against credit card fraud, and more, apart from providing the obvious perks that come with a credit card. You will be informed about the respective type of credit card protection insurance available at the time of applying for a credit card or with the welcome kit. Continue reading to know more.

What is Credit Card Insurance? 

Credit card insurance is a unique plan that is designed to protect you from a range of different liabilities. Depending on the nature of insurance, this plan offers financial protection from unpaid credit card bills, frauds and unauthorised transactions, and expenses incurred towards emergency travel assistance. Cardholders willing to subscribe for such insurance plans are often required to purchase it from their card issuer by paying a monthly or a yearly fee. 

Types of Credit Card Insurance Benefits

  • Credit Card Life Insurance/Personal Accident Insurance

Some credit cards offer a life insurance benefit. In case the primary cardholder has an accidental death, their nominee can claim accidental cover ranging up to a few lakhs as per the credit card type. Usually, a nominee can claim ₹2-₹4 Lakhs in the case of road accidents as part of the credit card accidental death insurance. Not only accidents, but depending on the bank’s policies and offers, you can get different credit cards with life insurance benefits as a form of security.

  • Air Accident Cover

Some credit cards come with an air accident cover when you book your flight tickets with them. In case the primary cardholder meets an unfortunate death in an air accident, his/her nominee can claim coverage up to ₹1 Crore as part of the card flight insurance.

  • General Air Travel Insurance/Lost Baggage Insurance/Trip Cancellation Insurance

At the time of opting for air travel, you can avail general travel insurance. This covers lost baggage, misplaced passports, hotel room cancellations, and any other reason that disrupts your travel plan. This travel insurance can be availed at the time of flight/hotel bookings via your credit card.

  • Medical/Health Insurance Credit Card

Several credit card issuing banks have partnered with health/wellness companies to come up with co-branded cards offering health benefits such as annual check-ups, unlimited consultations, and more. Apart from these perks, you can also avail an overseas emergency medical insurance on some credit cards with an upper limit of ₹25 Lakhs.

  • Credit Card Insurance on Purchases

Certain credit cards offer purchase protection coverage. It is a type of insurance that you can avail of on all the items you purchase with a credit card. In the case of any damage or loss to the purchased item, you can claim this insurance. Generally, a claim window of 180 days from the date of purchase is allowed.

  • Credit Card Car Rental Insurance

In case you rent a car for travel purposes and it incurs damage due to an unfortunate accident. These damages can be paid for if you have rented it out with a credit card offering rental insurance.

  • Credit Card Theft Insurance

In the case of credit card loss/theft/misplacement, you can claim for any losses incurred due to fraudulent activities or transactions made via your card. However you will need to have availed credit card theft insurance.

  • Credit Insurance

In the case of the untimely death of the primary credit cardholder, certain credit card issuing banks/companies offer a waiver on his/her outstanding credit card bill. This can amount up to ₹50,000. In order to make the claim, a nominee needs to submit the death certificate of the primary cardholder along with other necessary documents.

Benefits of Credit Card Insurance

  • As part of insurance, credit card coverage can include accidents, travel, roadside assistance, and much more

  • Such credit cards provide financial security to the cardholder against any unforeseen circumstances

  • Some insurance credit cards provide protection and insurance cover against online scams and credit card frauds

  • Employers can also extend insurance benefits to their employees with some corporate credit cards that offer the insurance feature

  • Credit card insurance can cover the expenses that you will have to incur for treatment of critical illnesses, which are often very expensive

  • Credit card protection insurance also covers loss of income due to job loss or a temporary or permanent disability 

  • Situations like death or dismemberment arising out of an accident are also covered by credit card insurance

Insurance Credit Cards from Top Banks

Insurance Credit Cards

Benefits of Insurance Credit Cards

Axis Privilege Credit Card

  • Air accident cover up to ₹2.5 Crores

  • Get credit shield of ₹1 Lakh

  • Get purchase protection plan up to ₹1 Lakh

  • Loss travel document cover and delay in check in baggage cover up to US$300

  • Loss check-in baggage cover up to US$500

HDFC Regalia Credit Card

  • Get accidental air death cover worth ₹1 Crore

  • Get emergency overseas hospitalisation: up to ₹15 Lakhs

  • Get lost card liability cover of up to ₹9 Lakhs

Kotak Royale Signature Credit Card

Get insurance on any misuse of your card for up to ₹3 Lakhs

IndusInd Bank Platinum Aura Credit Card

  • Insurance cover on loss of passport up to ₹50,000

  • Insurance cover on loss of ticket up to ₹25,000

  • Insurance cover on missed connection up to ₹ 25,000

SBI Signature Corporate Card

  • Complimentary travel insurance cover for the respective company’s employees up to ₹1 Crore

  • Complimentary insurance cover against fraud by employees, exclusively for SBI Corporate Card clients

 

How Does a Credit Card Insurance Plan Work? 

Let’s take up an example to properly understand how credit card protection insurance works. Assume that you purchase a card insurance plan offered by your credit card issuer for a nominal yearly fee. You then proceed to use your credit card for multiple purchases, leading to a huge outstanding balance. But before you could even get the opportunity to clear your dues, you meet with an accident that disables you temporarily for a few months. 

Due to your disability, you lose your income source, rendering you unable to pay your credit card dues. Now, since you have a credit card insurance plan in place, you can simply file a claim with your card issuer. This will allow you to clear  your outstanding dues without your credit score getting impacted in any way. 

Now, keep in mind that the amount of coverage that a credit card protection insurance offers may vary depending on the plan that you opt for. Low-end insurance plans are designed only to pay the minimum amount due on your card, whereas more expensive insurance plans will most likely cover larger amounts. 

Why You Need a Credit Card Insurance 

There are many reasons why you should opt for a credit card insurance plan. Firstly, you can protect yourself financially from liabilities which you may not be in a position to handle due to situations beyond your control. 

For instance, you may have lost your job, met with an accident, or be temporarily or permanently disabled. In such situations, you may not be able to pay your credit card bills on time, which can lead to your credit score taking a huge hit. 

A credit card insurance plan can protect you from all by helping you clear your card’s dues on time, thereby ensuring that your credit score stays intact no matter what. 

Claiming Credit Card Insurance: Points to Remember

While there are several insurance benefits you can avail on your credit card, it is important to know how to claim it in case the need arises. Below listed are some key points to remember while claiming a credit card protection plan:

  • One of the most important points to be noted for credit card protection plans is that you need not pay a regular premium on your insurance credit cards. As is the case with traditional insurance plans. The insurance comes as part of your credit card features when you avail it from the issuer.

  • The credit card insurance policy majorly benefits the primary cardholder

  • In the event of a nominee filing a claim after the death of the primary cardholder, he/she needs to ensure that all the necessary documents are submitted. These include a death certificate, accident FIR, police reports, hospital reports, post-mortem reports, etc., as requested by the credit card issuer.

  • In case the credit card protection plan does not cover credit insurance in the event of the death of the primary cardholder, the outstanding bill amount will be deducted from the final settlement received by the nominee.

FAQs on Credit Card Insurance

✔️Is there any insurance on credit cards?

Yes, depending on the type of issuing bank/NBFC and the type of credit card you avail, you can enjoy insurance benefits like accident cover, insurance on purchase, medical insurance, lost baggage insurance, car rental insurance, and more on your credit card.

✔️What is an insurance credit card?

Some credit cards offer an insurance feature as part of its several benefits. This insurance may cover categories such as travel, lost baggage, missed flights, life coverage, road-side vehicle assistance, protection against fraud, etc.

✔️Is credit card insured in India?

In case your credit card is stolen/lost/ misplaced, you can claim the insurance on any fraudulent activities done via your credit card if your credit card issuer provides the facility. Moreover, certain credit cards come with their own insurance benefits such as car rental insurance, travel insurance, accidental cover insurance, and more as parts of its features. You need to ask the issuing bank/financial institutes about availing credit card insurance coverage on your card at the time of applying.

✔️Does using credit card insurance affect credit score?

Certain credit cards offer insurances such as travel insurance, accident cover insurance, medical insurances, etc., as part of their features and benefits. Thus, availing these credit card protection plans do not affect the credit score.

✔️Which are the different types of Credit Card insurance available?

There are four types of credit card insurance offered: accident insurance, travel insurance, credit insurance, and purchase insurance.

✔️What are the advantages of Credit Card Insurance?

Some of the advantages of credit card insurance include providing coverage for accidents, travel, and roadside assistance. Some insurance credit cards provide protection and insurance coverage against online scams and credit card frauds as well as against any unforeseen circumstances.

✔️How much accident insurance can you expect?

Various credit card companies offer accident insurance cover worth ₹2 Lakhs up to ₹40 Lakhs based on the type of credit card being offered. The insurance cover offered for road accidents varies between ₹2 Lakhs to ₹4 Lakhs. While for air accidental deaths, it ranges between ₹10 Lakhs to ₹40 Lakhs.