Credit Shield is an insurance cover for your credit card bills. In other words, if an individual is unable to pay the credit card bills under certain conditions or circumstances, the credit shield pays off your outstanding credit card outstanding balance. This not only saves your loved ones the trouble of having to pay off your bills but also saves you under circumstances which are beyond your control. But, instead of paying premiums, credit shield insurance works slightly differently. You pay an extra amount on your credit card bills every month.
What Does Credit Shield Plans in UAE Generally Cover?
Most banks have different coverage policies for credit shield, just like any other personal insurance products available, in UAE. However, here are the most common situations when your credit shield can be claimed to make your outstanding credit card bill payments, when you cannot:
- Natural Death: If the policyholder expires due to natural causes or under natural circumstances, such as heart attack, liver failure or cerebral attack, the credit shield will allow the nominated members of the policy to clear off the credit card bill debts completely in most cases.
- Permanent Total Disablement: This is a coverage area which is slightly tricky. Total disablement are cases where the policyholder is incapable of taking care of himself or herself at all. However, there are two ways, by which this can happen. The most common one being permanent total disablement caused by accident is easy to understand. But, when one is referring to permanent total disability caused by sickness, it could mean that, a disease triggered the state of the individual.
- Death Caused by Accident: This coverage area is as simple as it sounds. If an accident caused an individual’s death, his card bills will be covered through his or her credit shield. Sometimes there needs to be an investigation for the cause of death, as certain causes of death are not covered even by a personal accident insurance, leave alone any general or life insurance product. This may include premeditated death or suicide.
- Temporary Total Disability: Again, similar to permanent total disability, it can be caused by both an accident and sickness. One of the most common situations of temporary total disability is when an individual experiences comatose state. But, the definition of temporary total disability and what would be considered so is often dictated by the terms and conditions or policies of the bank, since it varies on their definition.
- Critical Illness: Generally when one refers to critical illness, it is when, recovering from the illness, is matter of life and death. It is essential to understand that the bank or the credit shield provider will have the critical illnesses listed for you, which the policyholder should be aware of.
- Involuntary Loss of Employment: Though this is very simple to understand, it is essential to get a clarity that, if an individual loses his or her job, without resigning and instead has been asked to leave the organization, the credit card outstanding bills will be paid off. However, under this area to policies on coverage in terms of reasons for loss of involuntary loss of employment may also be dictated by the bank or insurance provider.
- Terminal Illness and Male or Female Cancer: In case, an individual is diagnosed with a terminal sickness or is a cancer that can be treated but still holds a threat to an individual’s life such as breast cancer or prostate cancer the credit shield provides coverage. But, this is also highly subjective to the insurance provider’s policies. Some may even not even cover or give you the benefit in the first place.
Eligibility Criteria for Credit Shield
You firstly need to own a credit card in the first place, which goes without saying but there are some eligibility criteria especially for coverage eligibility through the program:
- He or she should be a primary or secondary card holder.
- He or she should regularly pay, at least the minimum amount payable on the outstanding balance.
- He or she should be within the coverage range of age, which is generally from the late teens up to 60 years of age.
Things to Keep In Mind When Using the Credit Shield Benefit
There are a lot of circumstances or situations where the bank does not cover the credit card bills despite of owning a credit shield insurance. This, can be a tricky situation and for many in UAE, which has a high standard of living, credit card bills can cause much distress. Besides going through the policy literature, here are things you need to make sure you are aware of when you have a credit shield on your credit card:
- Make sure that you pay your bills on time because the interest calculation is applicable on the extra fees that you pay for your credit shield coverage as well.
- In the case of loss of employment, make sure you have the termination letter, since most banks will deny you the credit shield coverage if you do not have a termination letter as proof for claim.
- Proper documentation such as hospital bills, doctor’s prescriptions and death certificates are vital to the claim and need to be furnished, so that the credit card bills may be cleared.
- All the benefits as listed by the bank, is available to the primary account holder of the card. However, the supplementary account holder has limited benefits based on the insurer’s policy.
- The minimum amount payable on the credit card bill for the last ninety days should be cleared off, else the coverage or claim will be denied.
- In the case of loss of employment, the coverage period, generally helps to pay off bills for 12 months from one month after the date of termination. This is a trend in UAE and may be different for different banks.
- Authenticity of a claim is taken very seriously and can sometimes have serious implications on the claim if one is unaware of the same.
- You should also be able within the coverage age range to be able to make a claim for this policy.
Credit Shield Claim and Documentation
The claims process is similar to any other insurance product and so are the documentation requirements.
For death or health medical related claims the general documentation includes:
- Hospital bills (wherever applicable)
- Doctor certificate for disability (wherever applicable)
- Death certificate (wherever applicable)
- Proof of ID
For loss of employment claims the general documentation includes:
- Termination letter
- ID proof
- Proof of prior employment