Don’t know the benefits of credit card insurance? Find out the benefits and find out whether credit card insurance suits your needs or not.
Credit Card Insurance
Ever get a call from a credit card telemarketer that offers credit card insurance?
Usually telemarketers will provide convenience in the manufacturing process and also offers in the form of cheap insurance premiums per month. Before agreeing, or for those of you who feel you want to apply for credit card insurance, first consider the discussion below!
Know What Credit Card Insurance Is
Actually what is credit card insurance and how are the benefits of insurance? So, does each credit card holder need credit card insurance? Regular credit card insurance is also called Credit Protector, Credit Shield, or Credit Guard.
It’s also called insurance, of course insurance itself aims to bear the risk of the policy holder.
In this case credit card insurance will bear the risk of default from the credit card holder due to several factors, including death, loss of work and so on according to the agreement in the prospectus listed. No need to worry, credit card insurance itself has been regulated in the Minister of Finance Regulation No. 124 / PMK.010 / 2008 concerning the Implementation of the Insurance Business Line in article 1 paragraph 2.
In the regulation it is explained that:
“Credit insurance is a general insurance business line that guarantees the fulfillment of the financial obligations of the credit recipient if the recipient of the credit is unable to fulfill its obligations in accordance with the credit agreement.”
In other words, any risk posed by the credit card holder due to the inability to pay the payment responsibility, will be borne by credit card insurance. Of course there are provisions that are regulated for the cause of default on credit card holders, including those who have had accidents or calamities that have caused death or permanent disability. If the credit card holder experiences the disaster, then the person concerned will be “free” from the burden of credit card debt.
Based on the rules of inheritance law, when a debtor dies and the debt has not been paid, the debt will be passed on to the heirs of the debtor. The size of the debt depends on the debt burden of the debtor and of course it will be troublesome for the heir as a debt payer who gets an inheritance in the form of debt. That is why credit card insurance exists and functions to provide a “debt free” status for the debtor, the credit card holderwho dies.
The nature of credit card insurance is twofold, mandatory and voluntary. Some banks require the holder to have credit card insurance, thus increasing the premium that must be paid. In addition there are also banks that do not require credit card holders to use credit card insurance facilities or voluntary. Banks that do not require credit card holders to use credit card insurance will provide an offer and also seek approval in advance.
How much is the credit card insurance premium & how does the protection work?
Each credit card issuing bank has its own policy in issuing premium rules from credit card insurance.
But, if averaged, at least credit card insurance premiums are in the range of 0.3-0.8 percent of the total bills of the month.
If simulated as follows:
Mr, Rima has a credit card bill of $ 20 million and the insurance premium from the credit card issuing bank provides a premium fee of 5 percent.
Then the amount of insurance premiums that must be paid by Mr, Rima during the month are:
$ 20 million x 0.5% = $ 100,000
The amount of the premium will be directly proportional to the amount of the monthly bill from the use of credit cards.
So the bigger your bill, the greater the amount of premium you must bear.
But, if you don’t have a bill for a particular month, then you don’t automatically have to pay the cost of credit card insurance premiums.
How is the Credit Card Insurance Submission Process?
At least there are 3 ways to apply for credit card insurance, including:
- Fill out the credit card insurance application form at the bank where the credit card issuer is concerned.
- Call an official call center from the issuing bank to apply for credit card insurance.
- Telemarketing is calling you to offer credit card insurance
Usually, the third way is the easiest and least complicated way because the telemarketers who contact you will take care of all your needs and you are only asked for approval.
But, they can only contact you if you are a credit card holder who regularly has your name registered in the system.
The heirs who will take care of the claim process need to pay attention to several things when the credit card holder dies, including the process of claims that must be done a maximum of 60-90 days, depending on the policies of each credit card issuing bank.
If the card holder dies, the heirs must process claims within a maximum of 60-90 days, depending on the policy of the credit card issuing company.
When submitting a claim, some data or documents that must be completed include:
- Claim Submission Letter from Participant / Heirs.
- Death certificate from the local kelurahan / Pamong Praja on behalf of the Participant.
- Minutes from the police if they die due to a traffic accident.
- Certificate from the Hospital / Doctor regarding the cause of the legalized death or the chronological certificate of death from the heir if he died naturally not in the hospital and without the treatment of the doctor (if he died of illness).
- Medical resume / Medical Report Permanent Disability from Doctor / Hospital for Participants
- Certificate from the local Republic of Indonesia Embassy (if died outside the territory of the Republic of Indonesia).
- Photocopy of Credit Card bill for the past 2 (two) months.
- Other documents as required by the Insurance Party: Photocopy of Family Card and KTP of Heirs
- Photocopy of Certificate of Heirs witnessed by the local Sub-District / Civil Service and known by the Sub-District Head (by a notary if Indonesian Citizens).
- Photocopy of power of attorney from all heirs to one of the heirs to represent all heirs in managing and receiving claims (in the event that all heirs cannot collect claims).
Know Your Needs
There are 2 opinions from credit card holders regarding credit card insurance.
First, those who need credit card insurance because their monthly bills can reach hundreds of millions.
Second, they feel safe if there is credit card insurance that protects their heirs if the credit card holder experiences a death accident.
In addition there are also those who feel that credit card insurance is not needed because the monthly bills are usually not too large (only the range of $ 5 million to $ 10 million) and the user’s ability to manage their finances.
How about you, do you need credit card insurance? Give your feedback in the fields provided below!