In today's dynamic financial world, credit cards have evolved beyond mere purchasing tools. They now offer a range of benefits that include built-in insurance coverage, providing you with added peace of mind and financial security. Understanding and leveraging these insurance benefits can significantly enhance your financial well-being.
Read on to know how credit card insurance benefits work and how you can harness them for comprehensive protection.
What are built-in insurance benefits on credit cards?
Credit card insurance benefits are additional perks provided by card issuers to cardholders, offering various forms of protection against unforeseen circumstances. These benefits typically cover a range of situations, from travel mishaps to purchase protection and more.
While specific offerings vary between card providers, common insurance benefits include travel insurance, roadside assistance, purchase protection, extended warranties, and even lost card liability.
For instance, IDFC FIRST Wealth Credit Card comes with a comprehensive coverage that includes air accident cover of ₹1 Crore and personal accident insurance of ₹10 lakhs, lost card liability coverage of ₹50,000, and complimentary roadside assistance to keep you save while you are on move.
In addition, you also get travel insurance worth USD 1200 that includes loss of checked-in baggage and documents, delay in flight coverage and more. These benefits help you in case of mishap and can be claimed anytime anywhere around the world through the helpline number mentioned on the card.
How do credit card insurance benefits work?
Credit card insurance benefits provide coverage for eligible expenses or losses incurred by the cardholder. Depending on the type of insurance, coverage may kick in automatically when certain criteria are met, such as using the credit card to purchase travel tickets or rental cars. In other cases, you may need to register your purchases or trips to activate coverage.
When an eligible incident occurs, such as flight cancellations, loss/delay of baggage or stolen goods, you as the cardholder can file a claim with the card issuer or the insurance provider. Upon approval, reimbursement or compensation is provided up to the specified limits and terms outlined in the card's insurance policy.
Types of insurance benefits on a credit card
1) Travel Insurance: This typically includes coverage for trip cancellations, interruptions, delays, lost baggage, and emergency medical expenses incurred while travelling. The FIRST Wealth Credit Card comes with comprehensive travel insurance offering baggage loss coverage of USD 500, document loss coverage of USD 300, delayed flight coverage of USD 300 etc.
2) Purchase Protection: Reimburses the cardholder for damaged, stolen, or lost items purchased with the credit card, usually within a specified timeframe.
3) Extended Warranties: Extends the manufacturer's warranty on eligible purchases made with the credit card, providing additional coverage against mechanical breakdowns or defects.
4) Roadside assistance: Some cards like the FIRST Wealth Credit Card offer complimentary roadside assistance in case vehicle breakdown.
5) Trip cancellation Cover: You also get coverage for trip cancellations due to unforeseen reasons. IDFC FIRST Bank FIRST Wealth Credit Card offer Cancellations for Any Reason (CFAR) with 2 claims of up to ₹10,000, which is available for both flights and hotels.
How to get all-in-one protection with a credit card?
To maximise the insurance benefits offered by credit cards and achieve comprehensive protection, follow these steps:
1) Choose the right card: Research and select a credit card that aligns with your lifestyle and offers the insurance benefits you require. Compare the features, fees, and coverage limits of different cards to make an informed decision.
2) Understand the terms and conditions: Familiarize yourself with the insurance policies and terms associated with your chosen credit card. Pay attention to coverage limits, exclusions, and any requirements for activating or claiming benefits.
3) Register purchases or trips: Some insurance benefits may require you to register your purchases or trips to activate coverage. Be sure to follow the necessary procedures to ensure you're eligible for reimbursement or compensation when needed.
4) Keep documentation: Maintain records of your purchases, travel itineraries, and any relevant documents that may be required when filing a claim. This includes receipts, invoices, police reports (in case of theft), and medical documentation (for travel insurance claims).
5) File claims promptly: In the event of an eligible incident, submit your claim as soon as possible to expedite the process. Follow the instructions provided by the card issuer or insurance provider and provide all necessary documentation to support your claim.
Conclusion
Credit card insurance benefits offer cardholders a convenient and cost-effective way to safeguard their finances against unexpected events. Understanding how insurance coverage on a credit card works, you can leverage your credit card to enjoy all-in-one protection for your purchases, travels, and more.
Choose a card like the IDFC FIRST Wealth Credit Card that best suits your needs and follow the necessary steps to activate and claim your insurance benefits. With the right approach, you can enhance your financial security and enjoy peace of mind knowing that you are covered by your credit card's insurance benefits.
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