Credit Insurance Introduction
Here are some of the things that you need to know about credit insurance. Credit insurance was born at the end of nineteenth century, but it was mostly developed in Western Europe between the first and second world wars. Several companies were founded in every country; some of them also managed the political risk to export on behalf of their state.
“Credit insurance” is a term used to describe both trade credit insurance and credit life insurance.
What is credit insurance in general? Basically, if one has a credit card, he may probably know what the term means. This is because upon credit card application, the company will almost always make you avail of it. Like any other insurance, it is important to determine first your needs based on your lifestyle and standard of living to know what insurance is best for you. This is why credit insurance may prove helpful to some but burdensome to other people. While premiums for this type of insurance can go to certain highs like $25 to $30 a month, a little knowledge about credit insurance can help reduce that.
For the few who do not know what credit insurance really is, it is actually a sum of money that is paid by the credit card holder to the credit card company for the event wherein there is a sudden inability of the card holder to pay for his credit card debts.
This may sometimes happen due to certain factors, which may include disability, unemployment, or even, in worst-case scenarios, death.
Credit disability insurance is for those people who, as the name says, become disabled and are unable to pay off their debts due to employment that could have been lost due to the disability. Credit involuntary unemployment insurance takes care of your credit card bills when you somehow lose your job by getting fired. This type of insurance does not cover the loss of your job due to a resignation. Credit life insurance is the kind of credit insurance that pays off your credit debts should you pass away.
Another type of credit insurance is the credit property insurance. This often pays for the repair or replacement of items that have been purchased on credit and subsequently get damaged.
While some critics of this type of insurance say this is a big scam or a way to fleece consumers of big sums of money without their full knowledge, some people actually think that there is some security to be had with credit insurance. The debate about the worthiness of credit insurance goes on, with the decision to opt in or opt out solely left to the discretion of the credit card holder. While credit card insurance may be of some benefit to people with rather poor health who might end up on being unemployed should their condition escalate, some people have to read between the lines to figure out if this will be of some help to them in the future. As always, with a lot of things in life, it always helps to be informed and in the know.
by Maria-Goldsmith 19 years ago