Credit card disability insurance? Buyer Beware

Credit card disability insurance? Buyer Beware

If you use credit cards, you have probably come across credit card disability insurance. If you are considering purchasing this coverage (or already have it) you should carefully consider the protection you are buying and the cost you are paying each month for that protection. You should also consider the alternative disability or income protection programs that may be available to you.

The following list of pros and cons for purchasing credit card disability insurance might help you determine whether this is a program that will benefit you.

Credit Card Disability Insurance: Pros

While each credit card issuer will have its own unique set of guidelines, costs, and benefits, there are many similarities.

Consider the following list of benefits in a typical policy: 

  • If you suffer a disability or illness that leaves you unable to work, the insurance may suspend payments for a couple of years.
  • The disability insurance policy may even make your payments for you for your period of disability or up to the maximum specified in the policy.


Credit Card Disability Insurance: Cons 

While it might seem to be another way of protecting your good credit and lessening the stress that disability might cause, there are also some other factors to consider before purchasing credit card disability insurance: 

  • A typical fee for credit card disability insurance is around $0.90 per $100 of your monthly statement balance. So if you do the math – that would be an additional monthly charge of $13.50 on a balance of $1,500, or about $160 annually – if you maintain that balance throughout the year.
  • Some policies include clauses that require a loss of income for a certain period of time before you become eligible for benefits. Be sure to read your fine print.
  • Some policies may defer debt and may not actually make the payments for you. Make sure you fully understand the terms of your policy.


Do you need credit card disability insurance?

Consider the other options that will be available to you if you are injured or ill and unable to work. For example, the state of Rhode Island offers Temporary Disability Insurance (TDI) plans paid through payroll deductions, and offer coverage for loss of income for up to 30 weeks.

Workers’ compensation insurance protects you if you are injured on the job. Social Security disability insurance (SSDI) is also available for prolonged periods of disability, and will provide benefits that will help pay most bills. Seek the help of an attorney in the field of disability if you are unable to work because of injury or illness.

A qualified attorney can: 

  • assist with your claims;
  • manage your case;
  • ensure you don’t miss any important deadlines; and
  • help elicit a positive outcome for you and your family.


What if I need an attorney?

If you need help filing SSDI claims, talk to Rob Levine & Associates. We specialize in working with injured and disabled residents in Rhode Island, Massachusetts and Connecticut to navigate the disability insurance process. Call us today at 866-LAW-SSDI to set up a consultation to discuss your case with an attorney.

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