Perhaps you’ve already been offered a balance insurance on your credit card. But what does this really mean and should you accept it?
In fact, a credit balance insurance can protect you when an unforeseen situation such as a disability, job loss, serious illness, etc, happens.
A bank or financial institution must ask your permission to charge you this insurance. If you do not consent, they cannot charge you any fees. Moreover, this same bank or financial institution must provide all necessary information before and after your consent in regard to this insurance. Note that this insurance is not mandatory and should not be used as a condition for you to obtain a credit card.
How does it work?
Here are two examples that highlight how this type of insurance works:
- 1. If you die or if you suffer from a serious illness, the insurance will pay the balance of your credit card (up to an X amount);
- 2. If you suffer a serious injury, you lose your job or become disabled; the insurance will either take care of the minimum payments required on your credit card or will pay a percentage X of your monthly balance.
Naturally, these payments will only be made toward the credit card for which you have chosen the insurance. Each credit card will need its own insurance.
What are the requirements to be eligible for a credit balance insurance?
- 1. Your account must be in good standing;
- 2. You must not have exceeded your credit limit;
- 3. You cannot be behind on your credit card payments;
- 4. You should not have been recently denied payments with your credit card.
Source: Probleme de Credit