Need a Credit Card Protection Plan?

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Many credit cards offer additional add-ons and features that don’t automatically come with the card. Some features include credit monitoring, purchase protection, identity theft protection, lost wallet assistance, and payment protection plans. Most people don’t even know that those options are available and therefor never take advantage of the services. Then again, some of these services may be overlapping because the consumer is already signed up with an identity theft program independent from their card issuer, such as LifeLock, IdentityGuard, or TrustedID.  One thing you should highly consider, especially if you are terminally ill, have a high-risk of cancer, or are retired, for example, is a credit protection program. We are going to take a look at what a credit protection program is and examine major issuers' benefits.

What is a Protection Plan?

Basically this covers any outstanding debt you have with the card company if the primary card holder loses their job, becomes disabled, or dies. Not all states honor this plan like this woman found out when it was too late. As a Tennessee resident, she wasn’t told that the entire state of Tennessee doesn’t honor the protection plan, so make sure you know the terms of the plan before you sign up for it. Most people find this feature useless if they pay off their balances in full each month, but for those that don’t, you may want to consider paying a little extra each month for this kind of protection. It's important to enroll early because most plans require you to be enrolled for at least 30 days before being eligible to make a claim. In other words, don't wait until your laid off to start researching protection plans. The terms differ by issuer so let’s look at the differences between major credit card issuers.

 

boa

 

  • Premium- .85 cents/ $100 of monthly statement balance
  • Balance Cap- $25,000
  • Terms for Involuntary Unemployment/Leave of Absence- May cancel up to 2x the minimum monthly payment for up to 18 months, so long as the card holder has been working at least 20 hours/week during the 30-day period before job loss & must qualify for state unemployment benefits (in most cases). The event must have occurred at least 60 days after your protection began and must notify Plan Administrator within 300 days of the start date. 1099 individuals not eligible.
  • Terms of Disability/Hospitalization- May cancel up to 2x the minimum monthly payment for up to 18 months. Event must occur at least 60 days after your protection began. Must notify the Plan Administrator within 300 days of the start date.
  • Terms of Death- May cancel up to $25,000 of outstanding balance. Event must occur at least 60 days after your protection began. Must notify the Plan Administrator within 300 days of the start date.
  • Other- May cancel up to 3 monthly payments for 2 of the following events per year; marriage, divorce, childbirth, adoption, relocation, college entry, graduation, & retirement (only once per account on retirement). Must notify the Plan Administrator within 300 days of the start date.
  • *Bank of America has since pulled their program

cap1 logo

 

 

  • Premium- .99 cents/ every $100 of monthly statement balance.
  • Balance Cap- The balance of the credit limit or $10,000, whichever is less.
  • Terms for Involuntary Unemployment/Leave of Absence- May waive minimum monthly payment for up to 12 consecutive months & must be unable to work for at least 30 days. Requests for benefits must be made within 12 months of the date of occurrence.
  • Terms of Disability/Hospitalization- May waive minimum monthly payment for up to 12 consecutive months & must be unable to work for at least 30 days. You must be unable to work for wages & regularly attended by a physician. Requests for benefits must be made within 12 months of the date of occurrence.
  • Terms of Death- May cancel up to the credit limit or $10,000, whichever is less.
  • Other- Your account may not receive more than one benefit payment during the same billing period.
  • *As a note, at the time of this publication, Capital One is no longer accepting new payment protection plan members

 

chase logo1

 

  • Premium- .80 cents/$100 of monthly statement balance.
  • Balance Cap- Not disclosed
  • Terms for Involuntary Unemployment/Leave of Absence- May waive minimum monthly payment and interest for up to 2 years. Must be working at least 30 hours/week before job loss.
  • Terms of Disability/Hospitalization- May waive minimum monthly payment, plan fee & interest up to 2 years.
  • Terms of Death- N/A
  • Other- May waive minimum monthly payment & interest for up to 4 months for marriage, divorce, childbirth, adoption, relocation, retirement, business loss, & military service. Waives 1 month’s payment every year for New Year’s Day, Memorial Day & Labor Day.
  • *Chase recently pulled their credit card protection program

 

Citi_Logo

 

  • Premium- .94 cents/ $100 of monthly statement balance for basic plan covering you only. Additional plans available at extra cost for other authorized users.
  • Balance Cap- $10,000
  • Terms for Involuntary Unemployment/Leave of Absence- May suspend payments and freeze account for up to three months for family leave from full-time employment if you have employer approval & leave is for childbirth, adoption or chronic illness of a family member. May suspend payments & freeze account for up to 2 years if:
    • Lose all employment income for 30 days in a row
    • Lose job caused by being laid off, dismissed, or strike
    • Worked at least 30 hours/week (15 hours for full time student) 80 days prior to job loss
    • Qualify for state or federal unemployment benefits
    • Register for work at a recognized employment agency within 30 days after job loss & remain registered.
    • Self Employed individuals loses all income for 30 days in a row.
  • Terms of Disability/Hospitalization- May waive minimum monthly payment & interest for 1 month if you receive emergency room care or become hospitalized for at least 1 night. Cannot receive emergency care & hospital benefits in the same month. May waive payments for up to 2 years if you are unable to work due to temporary disability for at least 30 days in a row & are under a doctor's care. May cancel up to $10,000 in debt if disability lasts more than 24 months.
  • Terms of Death- May cancel up to the balance cap.
  • Other- May cancel up to $500 of charges for auto, home or renters insurance deductible once/calendar year. May waive up to 3 monthly payments for natural disasters if you are directly affected by a declared federal disaster within the United States, U.S. Virgin Islands, or Puerto Rico. You must live in a declared federal disaster area and incur more than $500 in damages or miss at least 5 consecutive days of work because of the disaster. May waive 2 monthly payments for life events; marriage, divorce, childbirth, adoption, move, college entry or graduation or decade birthday. May only claim one life event benefit per calendar year.

 

discover network

 

  • Premium- .89 cents/ $100 of monthly statement balance.
  • Balance Cap- $25,000
  • Terms for Involuntary Unemployment/Leave of Absence- May suspend payments & freeze account for up to 9 months for involuntarily unemployment or up to 3 months for qualified leave of absence. Must be working a minimum of 30 hours/ week for the 30 days preceding date & be out of work for at least 30 days in a row. May cancel account balance if involuntary unemployment lasts more than 9 months. Leave of absence must be approved by employer for the purpose of attending to needs of immediate family member due to an accident, illness, or paternity leave.
  • Terms of Disability/Hospitalization- May suspend payments up to 3 months if an immediate family member becomes disabled or hospitalized. May suspend payments and freeze your account for up to 18 months if you are unable to work due to temporary disability for at least 30 days in a row. Must be working an average of 30 hours/week 30 days prior to the date, & be under a licensed physician's care. May cancel account balance if temporary disability lasts more than 18 months or if you’re permanently disabled. May suspend payments & freeze account for up to 25 months if you are admitted to a skilled nursing facility, including:
    • A hospital, convalescent hospital, nursing home, or a psychiatric facility
    • Stay in the hospital or skilled nursing facility for a minimum of one night
    • Under a licensed physician's care while the injury or illness continues to impair ability to perform normal daily activities.
  • Terms of Death- May cancel account balance if you or spouse dies.
  • Other- May cancel 1 minimum payment/ calendar year for marriage, birth, adoption, move, new job, retirement, college entry, or decade birthday. May suspend payments and freeze account for up to 3 months for identity theft. May suspend payments and freeze account for up to 3 months for divorce, legal separation or natural disaster that displaces you from your home. May suspend payments and freeze your account for up to 25 months for military duty.

*American Express has discontinued their protection plan program

*Barclay only has payment protection listed in the UK- nothing for the United States could be found

Documentation will likely be requested as proof for any circumstances. As with all credit card terms and conditions, payment protection plans should be thoroughly researched and understood prior to signing up.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express.

Editorial Note: This content is not provided by Citibank. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Citibank.

*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.

 

 

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