Summary of this article
Credit cards bundle insurance benefits like accident cover, travel, and purchase protection.
Accidental death and air travel insurance apply only under specific conditions.
Lost card liability insurance limits losses if theft is reported promptly.
Premium credit cards usually offer higher insurance cover and extended warranties.
You own a credit card, but do you know that it comes with a few types of insurance bundled with it? All credit cards may not come with such benefits, so it is important to check with the card provider what all is covered. Also, premium cards with annual fees provide a higher sum assured.
We take a look at a few key types of insurance that come with a credit card.
Accidental Death Insurance
Here, the payout happens only if death occurs due to an accident. If it happens due to an illness, no money is paid out. The sum assured increases with premium cards. Claims require an FIR, death certificate, postmortem report, and other relevant documents.
Air Travel Accident Insurance
This applies to death and disability due to air accidents if the ticket is booked through a credit card. Coverage can be very high, especially for travel cards. The insurance claim requires a ticket, boarding pass, medical or death certificate, and a statement that shows the credit card statement for the flight booking.
Lost Card Liability Insurance
This provides cover on any fraudulent transactions once your credit card is lost or stolen, but only if you report it to the bank within a stipulated time. The insurance will protect against the misuse of a card for a window of 24-48 hours before the card is blocked. For the claim, you need an FIR, details of fraudulent transactions, and a bank acknowledgement of the block request.
Purchase Protection Insurance
This protects against theft, damage, or loss for a short period of items that are purchased with the credit card. The coverage is not permanent and does not cover wear and tear. FIR if the item is stolen; photos of the damaged item, if available, and the claim form issued by the insurer are documents required to make a claim.
Extended Warranty Protection
This extends the original manufacturer's warranty on products purchased using the card, usually for an additional year or more. However, manufacturing defects and not accidental damage are covered. This benefit protects a gadget or appliance after the warranty expires. One can pay for an extended warranty, but this feature may be included in the credit card.
