Credit Card Balance Protection Insurance
What is credit card balance insurance? What is the cost? There are many ways that you can lose your income from illness or injury, so that you can’t work and death, your income is down, and your ability to pay bills may be damaged.
The financial institutions that provide credit cards will no doubt try to sell you credit card balance protection as a means to manage credit card obligations. If this happens, this is the principle of its work.
This is an insurance plan, so you have a premium claim and benefits. The premium is a strange way of saying that you will claim a claim when there is a guaranteed situation, and you get the benefit.
If your claim is accepted in the case of a credit card balance, a joint claim is a major disease or death for unemployment, and the benefits vary according to policy, but are usually equivalent to paying your minimum monthly payment.
If you have no income for the time being and can also pay more balances in extreme cases, such as a more serious illness or death, this is a basic example. Your credit card needs an average of $500 a month. You have registered the balance protection of the credit card and the cost is recorded as a balance of $100 per dollar, which means you pay a monthly payment. The monthly premium is increased to $500 per month on your credit card bill, 94 cents per 100 dollars for the month when taxes are increased by $4 and $70.
If you put forward a claim that you have lost your job, balance protection insurance may pay you the minimum amount for a period of time, but let us dig deeper and some people may mistakenly believe that there is no premium.
If you often pay off your credit card bills every month, but it’s not the case, you can charge a premium based on the average daily balance of the settlement cycle, for example, assuming your settlement cycle is from January 1st to January 28th.
On January 5th, you purchased $1000, and you will pay the full amount of January 25th. When you receive a credit card to the bill, it will show your balance is zero, but your average daily balance is $714 and 29 cents. What are you thinking about, where does the number come from?
You have a balance of $1000 for 20 days, and you have a 8 day surplus, so the average daily balance of 28 days is $714 and 29 cents, so even if you can fully pay off the balance before the deadline, you may still have to pay an average of 94 cents per day balance of $100.
In this case, the premium will be $714 and $100 x 94 cents per 29 cents, equivalent to $6 and 71 cents, generally speaking, if you have a separate and sufficient life insurance coverage of the disability insurance and an emergency fund, most experts agree that the balance protection is not required.
Each policy is different. The formula is used to calculate the premium rate, the conditions of insurance and the amount of benefits will be listed in your specific agreement, read them wisely and understand what you have obtained and your ‘pay.