Credit cards are like unexpectedly finding money in your old jeans pocket, especially at the end of the month when you are running out of money. From unplanned shopping sprees to paying unexpected medical bills, a credit card is a friend you can always rely on. However, a lot of people still remain in the dark about the various insurance benefits, that you can enjoy for free if you own a credit card.
If you have ever paid attention to your credit card welcome kit that arrives with your card, you would know that your card comes with multiple insurance covers, entitling you to various benefits. While the benefits depend on the type of card and financial institution issuing it, the benefits are more or less as listed below:
[Still wondering which credit card to buy? Refer this list of top 5 credit cards in India]
Credit Insurance: In the event of an accidental death, your Credit Insurance waives off up to Rs 50,000 from your outstanding balance. Obviously, the amount may be different for different credit card providers. If your card has not been active for a while, a death certificate is supposed to be submitted to claim this insurance.
Personal Accident Insurance: If you are contemplating getting an accident insurance, go through your credit card kit first. It is quite likely that you already have one. Most credit cards provide a Personal Accident Insurance under which you can claim around Rs 2 lakh to 4 lakh in case of injuries or death due to road accidents. If the accident happens in air, the claim amount is around 10 lakhs to 40 lakhs, depending on the credit card company.
Trip Cancellation Insurance: Insurance is protecting yourself from incurring a heavy loss in case of occurrence of an unexpected incident. And we know very well about the countless possibilities that a highly-awaited, exciting trip can get cancelled. While nothing can cover the disappointment, your credit card might still be able to cover for the non-refundable flight tickets. Although, the trip cancellation insurance provided by credit cards does not recompense for the loss if the trip is cancelled due to an existing illness or weather conditions. There may be other terms and conditions depending on the credit card you own.
Lost Baggage Insurance: Even if your trip does not get cancelled, there is something that still threatens to dampen all your excitement i.e. lost baggage. Your credit card can cover that loss, too. If you have booked your flight ticket using your credit card then you are entitled to a reimbursement for your lost baggage, in case you don’t receive your luggage within 48 hours of arrival at your destination.
Rental Car Insurance: If you are renting car without paying for the insurance, then it would be wise to pay for the service with your credit card. Many credit cards now offer Rental Car insurance as well, covering the damages done to the car in an accident. Obviously it is subject to whether you were following proper traffic and driving rules or not. Also, the insurance does not cover medical expenses of the injuries incurred and theft or loss of personal property from the car at the time of accident.
Mobile Phone Replacement Insurance: With the market flooded with high-end smartphones, credit card companies have also started providing a claim cover of up to the price of the mobile phone you paid, in case your cell phone gets stolen or damaged. To avail this benefit, purchase your phone using your credit card.
Purchase Protection: This is the most common insurance benefits offered by credit card companies. Under it, you can receive up to Rs fifty thousand, if the product, you purchased with your credit card, is lost or stolen or damaged in fire, within six months of purchase.
So, go through your credit card kit thoroughly, check what benefits you are entitled to and make the most of them. Also, if you are going to buy a credit card, ensure you get one that offers most of these insurance covers or even more like flight hijacking, loss of passport, etc.