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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
Benefits of Insurance Credit Cards
Axis Privilege Credit Card
HDFC Regalia Credit Card
Kotak Royale Signature Credit Card
Get insurance on any misuse of your card for up to ₹3 Lakhs
IndusInd Bank Platinum Aura Credit Card
SBI Signature Corporate Card
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.
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.
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.
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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.
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.
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.
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.
There are four types of credit card insurance offered: accident insurance, travel insurance, credit insurance, and purchase 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.
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.