Credit Disability Insurance
Credit disability insurance is similar to credit life insurance except that the covered event is disability.
Credit disability insurance helps with respect to credit card debt if you become disabled.
Credit disability insurance helps to maintain your credit rating which can be important in a time of crisis.
Plans vary with respect to the benefit provided:
- Some plans put a freeze on all card payments, interest and fees.
- Some plans pay the minimum amount due each month. In this case, while you may not have to make payments, interest on the balance will continue to grow.
- There may be a limit on the amount of time the plan will cover -- such as one or two years.
- There may be a waiting period before the plan starts to cover.
- With some plans, you cannot make additional purchases on the credit card while the freeze is in place. With others you can.
Credit disability insurance is generally obtained directly from the creditor. As with credit life insurance, credit disability insurance is likely to be included in the "bundled protections" often available with credit cards.