A topic I have never covered is the life insurance option you can receive from credit cards. Most usually cover the balance on the credit card and some offer life insurance amounts. However, most of the higher amounts of life insurance is actually accident death insurance. Meaning you have to die in some type of accident: i.e. fall off roof and die or more common die in a car accident. Generally, the cost is very little due to the odds someone actually dies due to an accident.
If you are looking at protecting your family a good term policy is better than an accidentally death policy. I’ll give you an example. I had an aunt who was in her early 40s and died due to a brain aneurysm. She had a life insurance policy for $500,000, but when we called to look at filing a claim we discovered the policy was an accidental death policy. Since a brain aneurysm is not an accident the insurance company did not pay the claim. Just so you know the monthly premium was on $8 a month, but offered little death protection.
If you are called by one of credit card companies about a life insurance policy you better think twice about the insurance. If you feel the cost is not that much then go ahead and buy a policy. The only advice is to make sure you have other :true life insurance” that will protect your family and spouse. What I mean by “true” life insurance is that if you die it pays regardless of cause of death.
Life insurance is an important part of any financial plan especially if you have a lot of credit card bills. Remember if the accounts are joint accounts then your spouse is still responsible for that bill. If you are single make sure you have designated someone as a beneficiary on all your life insurance, retirement plans, and bank accounts. If not the money will be payable to your estate and then the credit card companies can file a claim to receive the balance left on the account. Yes this is technical, but should be done regardless.