“Dear Steve,
A hard working blue color man, worked for 30 years before getting injured on the job May of 08. I am now considered disabled. Besides trying to save my home from foreclosure, Capital One is suing me for nonpayment; I received papers from the sheriff saying I have 20 days to respond.
Seeing how I am disabled and was injured on the job and not able to work , am I still libel for these payments or is there some kind of insurance on credit cards?
Steven”
Dear Steven,
Credit protection insurance is available on credit cards but I don’t suggest it. I don’t like it for two reasons, it rarely pays off and it is expensive.
An offer I saw yesterday was $0.89 per $100 of debt, monthly. So if you are carrying a $10,000 of debt you are paying that it will cost you $89. You are much better off putting $89 a month in a savings account and letting that grow.
Insurance is priced so that the company receives more in premiums than it costs to pay out claims. That’s how they make a profit. Also, the insurance company knows that not every person will make a claim or be eligible for a payout. So let’s say 1% of claims are ever paid out over a five year period. That is reasonable. For every 100 similar people are paying for this type of insurance the company will have collected $534,000 over five years and maybe paid out one $10,000 claim.
Credit protection insurance is a huge money maker for the banks and that’s why they push it.
If you were hurt on the job you should get yourself a lawyer to protect any claims you might have for wok comp and possibly SSDI, depending on your disability.
Steve
