Credit card insurance is a add on feature that lenders want you to agree to.  Balance insurance is designed to provide coverage to help you pay down your credit card balances should you experience a hardship like a job loss, hospitalization, or if you die.  Often balance protection insurance is offered when you first apply for a new credit card, or you receive a credit limit increase.  Of course, balance insurance is optional, and you do not need to sign up for it to get approved for a credit card.  If you have personal insurance through your employer (life and/or disability insurance) or have an additional insurance policy (term life insurance) you may not need credit card balance insurance.  Balance insurance would be charged on a monthly basis and must be agreed to by the user giving your express consent for this option.  This would be a separate feature to your card and not part of other non-optional insurance features like extend warranties, auto collision, bonus offers and points, or travel insurance coverage.

Christine’s Tip:

Honestly, I feel credit card balance insurance coverage is a big money grab from credit card companies.  Why do you need balance protection if you are a responsible credit user?

Balance insurance is expensive and will not cover pre-existing conditions or critical illnesses.  Paying a monthly premium for this insurance coverage seems counterproductive if you plan to pay off the balance every month.  Also, make sure you read the entire insurance contract conditions.  Often times there are maximum amounts that you will be able to claim with stipulations on how to do so.  Bottom-line, only you can decide if this feature is worth it – just make sure you are not overpaying just for the privilege of using this credit card.