Thanks to Credit Cards, our spending habits have transformed massively. In addition to the convenience they offer, Credit Cards come loaded with tons of different features and benefits. You may choose a Credit Card that gives you special privileges and lounge facilities or one that is 'lifetime free'.
In addition to these features, you must look into one crucial feature the Credit Card offers: insurance benefits.
Different types of credit insurance
Let’s look at the different types of insurance available on credit cards
1. Credit Insurance
Credit Cards are mainly used as an alternative payment option that allows you to pay for your purchase later. Sometimes, you might face unexpected situations such as a job loss, being involved in an accident, or sudden disability.
A few Credit Card companies offer complimentary credit insurance on some of their Credit Cards, whereas some charge a monthly fee for this coverage. This insurance comes to your rescue during such unforeseen events, helping you settle your dues and ensuring your credit rating does not take a hit.
2. Zero-liability cost cover
Losing your credit card can be very stressful, as anyone can misuse the card for fraudulent transactions. In such situations, the zero-liability cost cover protects you and ensures you are not liable for fraudulent transactions on your credit card. However, such coverage is usually only applicable in cases where the OTP/PIN/Password has not been compromised by the customer.
3. Travel Insurance
Travelling is not always smooth; sometimes, flight cancellations or delays occur for various reasons. Few card issuers offer insurance coverage against situations like:
- Baggage delay/loss / stolen
- Loss of passport/travel documents
- Air accident
4. Air Accident Cover
Most credit cards offer life insurance in the case of loss of life due to an air accident. To avail of the benefit, you must submit your insurance nomination form to the bank.
5. Purchase protection
Some cards offer protection against fire or burglary within 90 days of purchases made on the credit card and if the fire is in the residential premises of the cardholder. Jewellery and perishable commodities are not covered in this insurance.
Many banks also offer insurance on document replacement, rental cars and accidents. The insurance offered works just like any other insurance product.
Conditions to keep in mind
Most cards have conditions that should be met to avail of the insurance coverage.
- For instance, in case of air accident cover, the sum insured will be paid only provided the cardholder has performed at least one POS transaction 90 days before the accident and if the air ticket has been booked using that card. Also, the bank must be informed of the accident within 30 days of the event and the required documents must be submitted within 90 days of the incident.
- Similarly, card protection insurance may be available only if a transaction (purchase/EMI/payment transaction) is made at least once within 90 days before the occurrence of the incident, for which the claim is being made. Inactive cards and cards that are overdue for payment will not qualify.
[Also Read: Your debit, credit cards have inbuilt personal accident, air insurance covers]
Conclusion
Credit Cards are a blessing in times of financial crisis. However, you must keep your credit cards secure to avoid misuse. Remember never to share or compromise your secret credentials like PIN/OTP/Password, avoid clicking on suspicious links and always use the customer care number mentioned on the Bank’s official website. Credit Card Insurance is one such way of ensuring peace during chaotic scenarios.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
