Credit Insurance

Larger credit card companies often offer bundled protection plans that cover payments, and sometimes interest and fees as well, during a period of time after a specific event. Some of the events for which benefits are provided are:

• Involuntarily losing your job. Quitting is not a covered event.
• If you become hospitalized.
• If you leave work on a short-term leave or a longer leave such as under the Family And Medical Leave Act.
• If you become permanently disabled (credit disability insurance) or die (credit life insurance.)

Benefits vary for different events. For example:

• If you become hospitalized, your account may be put on hold and you may not have to make any payments at all for up to two or three months.
• If you lose your job involuntarily, you may not have to make any payments for 12-18 months.

Like all credit insurance, bundled protections do not ask health questions. Still, there may be important requirements before you have coverage. For instance, there may be a requirement that you work a certain minimum number of hours prior to the date of your claim.

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