How does it work? You sign up and if you loose your job do you just call them up and let them know? Do they contact your former employer?
you must have proof, usually from unemployment insurance. they may contact former employer but they will have you state last date of employment.
Yeah, you have to be eligible for unemployment, and you have to get the insurance before you become unemployed. I have this on my cards, but my big question is, how are the accounts reported if you activate the insurance? Anybody got a clue?
OK, George, I already know how you feel about this. But I will say this anyway. There is no other way to insure against unemployment and the need for unpaid family leave, other than to self insure. So, for some people, it is the best solution available. In addition, it is not underwritten - they don't check to see whether you are a good risk or a bad risk - they just give it to you. So, for someone who already knows that they are a bad risk, i.e. someone who already know they have a disabling disease, it is a good solution. In my case, I already know that my Mom's health can take precedence over my ability to earn money at any time - it already did, once. For me, it is a good solution, since no one else will cover this risk. I have disability insurance, it does not pay me if my Mom gets sick again, and I have to take care of her. Everyone has to decide for themselves what works for them. Just because it is expensive doesn't mean you shouldn't buy it. Just ask the guy I am helping right now, whose credit was ruined because he was injured in an automobile accident, took a year to recover, and his lawsuit has just been settled. His credit is shot all to heck. He defaulted on everything. Now he has his settlement, and is trying to clear his credit. No one is showing him any mercy. No thank you. I will pay before I take any chance of going through that again.
Thanks for the input everyone. I have an MBNA Plat card with a huge balance. I've been paying for credit protection and I work at a small business. I may get let go within a few months and I can keep up with my payments even without this job but I would rather not (since I've paid for the insurance) and go back to school for 1-year while having one less bill to worry about in that time. I also wonder how this will effect my score if I choose to use the insurance plan?
www.cardtrak.com (NEWS) Credit Protection (9/20/02) FULL STORY: Programs that offer to cancel your credit card debt if you die, or make your monthly payments when you are disabled or unemployed, have always been exorbitantly expensive for consumers. Finally, government regulators are stepping in and clamping down on such programs that are offered directly from banks. Many credit card issuers offer life/disability/unemployment insurance programs provided by third-party insurance firms. However, during the 1990s many of the top card issuers started to provide the protection directly after a Federal appeals court upheld that such products are banking products and not the business of insurance. But the popularity of these so-called "debt cancellation contracts" and "debt suspension agreements" among national banks has prompted the Office of the Comptroller of the Currency to issue a new regulation adding some consumer protections. The new rule, which takes effect next June, prohibits national banks from retaining a unilateral right to modify a "DCC" or "DSA," unless either the modification is favorable to the customer and is made without additional charge, or the customer is notified of the modification and had a reasonable opportunity to cancel the contract before it takes effect. The new OCC rules also prohibit national banks from conditioning the availability of credit upon a customer's purchase of a "DCC" or "DSA" and from engaging in misleading practices or using misleading advertising. The OCC says current disclosures required under the Truth in Lending Act are inadequate when it comes to the features of a "DCC" or "DSA". Therefore the OCC will require banks to tell customers of the prohibition on tying; explain that a debt suspension agreement, if activated, does not cancel the debt, but only suspends requirements to make payments; disclose the amount of the fees charged; make customers aware of the option to pay in a lump sum or periodic installments; disclose their refund policy if the fee is paid in a single payment and added to the amount borrowed; and tell customers whether they would be barred from using the credit line if the "DCC" or "DSA" was activated. In general, credit protection programs offered directly by the bank or through a third-party are expensive. The average cost to the consumers is about 65 cents per $100 of balance per month. This simply means if you carry a $3,000 balance you'll pay over $350 annually for life/disability/unemployment coverage. In most cases you are much better off obtaining individual insurance.
You can purchase disability/unemployment insurance privately. Its a much better deal than the overpriced stuff from the CC companies.
You have to file a Claim , you will need to fill out a form with proof of your unemployment, Disablity, ect There usually is a 30 day waiting period before the first pay is sent.. It is also for only the Minimum Payment on your balance.. Usually it will only cover you for 12 months.. As George said, at .08 per 100.00 of your balance it is quite a high Cost.. It benefits some people and some it doesn't.. Good Luc
Just thought I'd chime in my own $.02 worth. Wells Fargo offers PPI - Payment Protection Insurance in the event of disability or death of the card member. In the event of disability, then the required minimum payment will be made for you. In the event of death, the entire balance will be paid off. Wells Fargo offers this insurance on their credit cards for $.785 per $100 carried on a balance month to month. So, if your balance is $400, your insurance is $3.14. IF YOU ALREADY HAVE AN INSURANCE POLICY, YOU MAY NOT NEED THIS PPI! That's what insurance is for! If you do NOT have any insurance, I would take PPI until I found a lower cost alternative. The banks make a lot of money off of PPI! In fact, I was offered PPI on a SECURED CREDIT CARD! Can you believe that? Just use my collateral account to pay it off! Just another example: When we do Home Equity LOC, the banker earns sales credit for the dollar amount of the line. So for a $100k line, the banker earns a $1,200 profit proxy towards their profit per day goals. If that same $100k line had PPI, that profit JUMPS TO $7500! (BTW, HELOC PPI is only $.145 per $100, so it's much cheaper than the unsecured CC.) You better believe that the banks make a lot of money off of PPI. Get it in place if you do not have a regular life insurance policy. If you do have life insurance, review it on a regular basis to be sure it will cover your credit liabilities should the worst happen.
It might just be me, but I automatically shy away from that insurance. The credit cards/car dealers/banks push it way, way, way too hard for it to possibly be a good deal. Sort of like that $180 extended warranty Sears wants me to buy to cover my $350 mower.
Credit insurance is the biggest rip-off that any bank offers on credit cards.Why pay a high price on unsecured debt just to protect it when all you need is pently of available credit to take payment breaks if somthing happens?All you would have to do is to figure what your short fall would be then carefully use a balance transfer option.Paying a little more interest on a unpaid balance is a hell of alot cheaper then paying extra for credit insurance that isn't worth having.Not only do you have to make a minimum due payment but you also have to pay for the credit protector insurance monthy payments too. which can be very expensive if a person has a very high balance.Like take a person that has a 10K balance with a minimum payment of $200.00,now add the credit insurance which would be about $70.00 or so now the total minimum due would be 270.00.Sure the minimum payments would decrease over time but stop,and think is it worth it.All lender are really getting the benefits from the credit protection insurance not you.So weigh your options very closely.It would only make sense to have credit insurance on a mortage then credit cards because you can lose your house if you can't make the payments because this is a secured debt,and also an asset too,so this you would want to protect then unsecured debt.
Credit insurance is the biggest rip-off ble103 How long have you known that. ***You don't want credit life on this either?
