What is Credit Card Insurance? Benefits & How It Works

By OneCard   |   February 01, 2024

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What is Credit Card Insurance? Benefits & How It Works

Credit cards have been a go-to payment option for many as they enable you to spend now and repay later. Also, the additional benefits in the form of reward points, offers, smooth mobile app etc., make the whole experience richer and increases their appeal even more.


What is credit card insurance?

Credit card insurance is a unique financial feature that safeguards your financial interests from credit card liabilities. Depending on the type of insurance plan, it can protect you from unauthorised credit card usage, fraud, and emergency expenses during travel.

Certain credit cards offer integrated insurance coverage, including accident protection and travel insurance. Before making a decision, familiarise yourself with the available insurance plans to determine which ones are included with your card.

How does a credit card insurance plan work?

An insurance plan for credit cards works like any other insurance policy. Here, in case an emergency arrives, you will get financial support as per the terms of the plan you have agreed to.

Like any other insurance policy, you have to file for the claim, and then you will receive the required financial support.

Types of insurance covers available with credit cards

Now, let’s discuss the types of credit card insurance plans available in the market –

  • Credit card insurance cover on purchases

You can opt for this insurance plan for every item purchased with your credit card. It is nothing but purchase protection coverage. This can be claimed in case of any damage to the said product or if it is lost or stolen. The tenure of coverage and other details are insurance provider-specific, so review them before buying. This insurance plan is ideal if you are planning to purchase something expensive using your credit card.

  • Air accident coverage

This insurance coverage comes in handy when you book your flight ticket using your credit card and any mishap occurs. In such unfortunate incidents, the insurance company will pay the nominee the amount specified in the policy.

  • Medical insurance

Many credit card issuers have partnered up with health companies. As a result, co-branded cards have come into existence that offer several health benefits like consultations, annual check-ups, and many more. You can also avail of a credit card overseas medical insurance.

  • Credit card theft/misplacement insurance

In case of any credit card misplacement or theft, the cardholder can claim for any fraud or unauthorised transactions made with their card. This type of credit card insurance is convenient, considering the increasing fraud and scams.

Credit card insurance benefits

There are various advantages of credit card insurance; here are the prominent ones –

  • Insurance plans for credit cards cover travel expenses, accidents, roadside assistance, etc.
  • These insurance plans protect you from online scams and fraud.
  • Credit card insurance plans can cover any medical expenses, which are known to be expensive most of the time.
  • A credit card purchase protection plan saves your financial investment if you damage or lose what you have purchased.
  • These plans can also cover the default in payments due to loss of income or permanent disabilities.
  • Credit card insurance plans also cover deaths from accidents.

ALSO READ: How to Pay Insurance Premium Through Credit Cards?

Things to know when claiming credit card insurance

There are some things to know before submitting the claim for an insurance plan for credit cards. These are listed below:

  • The first thing you need to know is the type of claim. Whether a cashless facility or a reimbursement one, you must figure out and file a claim accordingly.
  • Keeping the policy details handy always helps, especially if you are travelling. It enables you to file a claim without any mistakes.
  • Attaching the proper papers with your credit card insurance plan while filing the claim is essential. It reduces the chances of claim rejection or delays.

Conclusion

Considering what credit card insurance brings, it makes more sense than ever. Enquire about the specifics of insurance coverage on your card by connecting with your card issuer.


**Disclaimer: The information provided in this webpage does not, and is not intended to, constitute any kind of advice; instead, all the information available here is for general informational purposes only. FPL Technologies Private Limited and the author shall not be responsible for any direct/indirect/damages/loss incurred by the reader for making any decision based on the contents and information. Please consult your advisor before making any decision.