Credit cards with built in insurance
Yes, it is time to expect more from your credit cards besides cash backs, discounts and reward points. You can even expect complimentary cover with your card! Credit card issuers are offering consumers premium cards that have an in-built insurance cover for travel-related (usually abroad) eventualities.
In fact, most premium cards come with complimentary insurance covers, which offer covers against any eventuality while travelling, such as accident, loss of passport and online frauds. The cover varies from 9,000 to 3 crore, depending on the feature and the card.
Examples:
- If you get stranded at the New York airport for more than 12 hours but have a high-end credit card from the Standard Chartered Bank (StanC), you could possibly earn 13,500 as it insures flight delays of over 12 hours.
- If you fall ill while travelling abroad, an American Express Platinum credit card can take care of your medical bills up to 22.5 lakh.
- ICICI Bank Platinum Identity Credit Card has an in-built air accident life cover of 1 crore.
Most premium cards have a joining fee of 2,000-5,000, though for some it can go up to 30,000. (This may be waived meaning be free during promotional offers). The annual fee for these cards usually ranges from 2,000-10,000. However, several companies waive it for the first year, especially if your spending has been above a certain limit during the year, say, above 5 lakh.
If your credit card is stolen, you can avail of the card protection cover. It is as simple as calling the customer care as this cover offers protection against fraudulent charges swiped on the lost or stolen card up to 12 hours before the loss is reported. To avail of the other covers, the process might take longer because you will need to submit various documents to support the claim, such as a copy of the FIR in case of baggage loss, death certificate or flight tickets.
It is true that insurers take anywhere between a week to three month to settle a claim because most people do not retain their documents thus making the claim process tough for insurers to ascertain the claim amount.
Important: Like any other paperwork you need to be careful, before paying a high fee for these premium cards. Go through the terms and conditions carefully as there are several caveats. For example your card might offer cover for delayed luggage but only for outbound flights etc.
Bottom line remains, do not go for these premium cards only because of insurance cover, but consider it an added benefit if you frequently travel abroad. Another point to note is that – it is not in any way to be treated as your primary insurance vehicle but an extra insurance cover. However, if your card has a high credit limit, a card protection cover for theft or misuse becomes very important.
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