Comments on: Is Credit Card Insurance a Scam?

By: Michael @ The Life Insurance Insider

Michael @ The Life Insurance Insider — Tue, 16 Dec 2008 15:40:32 +0000

Be sure and distinguish between credit life insurance and life insurance that may be endorsed by your credit card company.

The type of product described above is credit life insurance and is usually way over priced for the protection you get and as the author accurately describes it can be hard to contact the insurance company to make claims or cancel the insurance. Many times it is unclear who the insurer even is.

Many credit cards and banks endorse life insurance companies through the mail and through their websites. In this instance your credit card company may endorse a certain life insurance company or have a negotiated deal with the insurance company for a special rate or added convenience. In this instance you deal directly with the insurance company and the actual transaction works just like any other life insurance purchase.

By: DavidK

DavidK — Mon, 15 Dec 2008 15:06:26 +0000

If you really are worried about absolving your estate of your debts when you die, just get a large enough life insurance policy to take care of everything. I am only 30 but have a million dollar policy for only about $40 per month. It is more than enough to take care of all debts and have plenty left over for my family should the need arise. It is a 30 year fixed rate policy and is simply there to provide my family with peace-of-mind should the unexpected unfortunately happen. (Mind you this rate is for a physically fit, non-drinker, non-smoker who has a good driving record.)

I will say though that not all extended warranties are scams. Some are worth it, but all are definitely a gamble. The numbers usually fall in favor of the company granting the warranty. They have to, otherwise they wouldn’t be able to offer warranties at all.

By: Fit Wallet

Fit Wallet — Mon, 15 Dec 2008 12:50:23 +0000

Ugh, I get one of these offers at least once a month! Most recently, Chase tried to force me to “upgrade” to their Signature Freedom card. They sent a new card in the mail (despite the fact that my current card doesn’t expire until 2010) with a letter insisting that I had to call and activate it. The difference? An insurance plan got tacked on to the existing card–same interest rate, same cash back rewards program. I declined and shredded the new card.

By: Bill M

Bill M — Sun, 14 Dec 2008 00:31:37 +0000

All types of extended warranties are scam, including credit card insurance. They do not cover your balance, only minimum payments and for a short period of time, usually 2-3 years.

By: Melanie

Melanie — Sat, 13 Dec 2008 11:59:05 +0000

Also, it should be noted, that in the event of your death, you’re rarely bound to the terms of a contract signed while you were living. Apparently the collection agencies haven’t found a way to reach beyond the grave.

Not that they won’t try to collect from your survivors, they will. But they’re under no obligation to pay. One lawyer told me that he always recommends spouses split the debts down the middle, and make sure they’re not joint accounts.

That way you’ve just insured yourself for half of your debt balances, for free.

By: Andy @ Retire at 40

Andy @ Retire at 40 — Sat, 13 Dec 2008 11:07:07 +0000

Yeah, I agree. Unfortunately, I was paying for this for too long, then I realised that I pay off my bill every single month! Also, if something were to happen to me, I’d still be able to pay off the bill the next month, so in reality, I just didn’t need it at all.

By: Stella

Stella — Sat, 13 Dec 2008 03:07:05 +0000

I just wanted to add that credit card travel insurance is one of the worst scams! It almost never provides enough cover for what you need. Be careful.