Credit card insurance goes by quite a few names. While some banks call it credit safeguard, others use the terms "credit shield" while referring to credit insurance. However, credit card insurance aims to offer the cardholder with security in case of unemployment, disability, injury, or death, in case the cardholder ends up not being able to pay credit card bills. Banks provide insurance to the cardholders by paying a monthly fee that varies from bank to bank. Getting an insurance for a credit card helps one's credit rating remain unaffected while they go through a rough patch. This helps the cardholder to keep their credit score in a good standing with lending organisations. However, it is worth lending a thought if getting a credit card insurance is worth it or not.
Listed Below are a Few Pointers that will Help one Understand This
- Credit life insurance: If a cardholder avails credit card insurance, the bank pays the outstanding balance in case the cardholder passes away or becomes unable to pay the balance on his own. This can only be accommodated in a scenario in which the cardholder either becomes physically disabled or unemployed.
- Credit disability insurance: This kind of insurance pays off the minimum amount due on the card for a distinct period of time after a medical disability takes over the cardholder. However, purchases made after the cardholder becomes disabled will not be paid off.
- Credit insurance in case of involuntary unemployment: Under this insurance scheme, the bank pays off the minimum payment due on the cardholder's account in case they have been laid off from work or have been downsized by their company. However, purchases made after the downsizing will not be covered.
- Insurance of credit for property: Under this credit scheme, the bank will pay off for the purchases made using the credit card end up getting damaged or get stolen.
Types of Insurance Offered on Credit Cards
There are various kinds of insurance that come with a credit card and each company has its own set of covers and respective limits. The following insurance covers are some of the popular ones being offered with credit cards:
- Accident Insurance
- Travel Insurance
- Credit Insurance
- Purchase Protection
Various credit card companies offer accident insurance cover worth Rs.2,00,000 to Rs.40,00,000 based on the type of credit card being offered. The insurance cover being offered for road accidents are between Rs.2,00,000 to Rs.4,00,000. While for air accidental deaths, the insurance cover ranges between Rs.10,00,000 to Rs.40,00,000.
Some credit cards come with additional travel insurance benefits that provides benefits cover for lost baggage, lost passport etc. In cases where your baggage goes missing for more than than 48 hours post your arrival at the destination, you can claim a benefit from your bank. Some credit cards cover both domestic as well as international travel.
In some cases, your credit card comes with an insurance privilege where you may be allowed a waiver on your outstanding credit card amount, in case of accidental death.
Purchase protection on your credit card implies that items purchased using the card are insured in case the items are damaged or misplaced due to fire or theft. Purchase protection on credit cards are offered up to a value of Rs.50,000 that can be claimed within 180 days from the day the items were purchased.
Top Banks Offering Insurance Credit Cards
Some of the banks that offer insurance on their credit cards in India are:
- Standard Chartered Bank
- HDFC Bank
- IndusInd Bank
- Axis Bank
Standard Chartered Bank
- The Standard Chartered Visa Infinite Credit Card is an exclusive card offered to the bank’s priority banking customers.
- Along with some unique benefits and exclusive privileges, the card also provides a complimentary travel and medical insurance worth up to a maximum of USD 200,000, when travelling internationally.
- The HDFC Bank Regalia Credit Card is an all in one luxury credit card that comes with enhanced features and benefits.
- Among many others are is its comprehensive protection component. Cardholders of the Regalia Credit Card are entitled to an insurance cover against air accidental death and emergency overseas hospitalization.
- In case of an air accidental death, the cardholder’s nominee is eligible to get a compensation of Rs.1 crore. In case of a medical emergency abroad, cover worth up to Rs.15 lakhs can be claimed.
- The IndusInd Bank Aura Credit Card are premium lifestyle cards that come with top class exclusive privileges to suit your elite needs.
- Along with these attractive features, the bank also provides insurance cover by ICICI Lombard General Insurance Company.
- The cards provide an insurance cover of Rs.10,000 for lost baggage, Rs.50,000 for loss of passport, Rs.25,000 each for lost ticket, delayed baggage or missed connection.
Kotak Mahindhra Bank
- Some cards like the Kotak Royale Signature Credit Card offers security from card theft by offering a cover of Rs.2,50,000 against fraudulent usage of the credit card up to seven days before reporting the incident.
- The Axis Bank Privilege Credit Card comes with travel insurance benefits that offers you peace of mind when you travel.
- The air accident cover that you can avail with this particular credit card is Rs.2,50,00,000. The purchase protection that can be availed if you have this credit card is Rs.1,00,000.
- The Lost Card liability that you get is Rs.3,00,000. In case you lose your important documents on the flight, you can avail loss travel documents cover of USD 300. If there is any delay in the baggage check in process, you can avail a cover of USD 300.
- In case of loss of check in baggage you can enjoy check in baggage cover of USD 500.
- The Travel Card issued by ICICI bank offers great benefits and cover options for its customers. As personal air accident cover, the insurance policy holder can avail Rs.10,00,000.
- If you miss a connecting flight when traveling overseas, you can avail a cover of USD 300. If your important documents are lost while traveling, you can avail USD 500 as cover amount.
- These documents include tickets, visa, passport, etc. If the plane is hijacked, you can avail a cover of up to USD 3,000. In case there is delay in your checked bag receipt, you can avail a cover of USD 300.
- You can enjoy Rs.2,000 as Lost Card Liability cover and Rs.2,00,000 as Counterfeit Card Liability insurance cover.
- The HSBC Platinum credit card has no liability associated with it if you lose the card.
- If you report the loss or theft on time, you will not be held liable for any fraudulent activity on your lost/stolen card. All the insurance benefits that are available under this particular credit card are offered by ICICI Lombard General Insurance Company.
FAQs on Insurance Credit Cards in India
What are the types of insurance credit cards offer?
The types of insurance which are offered are accident insurance, travel insurance, credit insurance and purchase insurance.
What benefits do I receive under travel insurance?
Under travel insurance, credit cards come cover for lost baggage, lost passport, etc. If your baggage is missing for more than 2 days after your arrival, you can claim a benefit from your bank.
What travel benefits do I receive with the Axis Bank Credit Card?
With the Axis Bank Privilege Credit Card, you receive air accident cover of Rs.2.5 crore. Apart from this, you can avail loss travel documents cover of $300. A cover of $300 is given if there is any delay in the baggage check in process. In case of loss of check in baggage you can opt for the check in baggage cover of $500.