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Credit Card Repayment Protection Insurance

Whatever you use your credit card for, you could enjoy it more knowing that your repayment obligations could be protected.

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However, it’s important that you read the terms and conditions to understand your insurance, so you know what you’re covered for in every situation.

Payment protection insurance is insurance for your credit card that can help you make your repayments when you can't work.Whether you want to buy credit card payment insurance is your choice, and it is not an obligation when applying for a credit card. Usually this service is included in credit card packages.

Credit card payment protection insurance can you help you:

  • Cover your credit card repayments in the case you lose your job, or are unfit for work due to health issues
  • Pay your card balance up to a certain amount as defined by the credit card company if you die
  • Available to you if you hold an eligible card

What is payment protection insurance?

It is a type of insurance to help you cover your credit card repayments if something unexpected happens and you can't make them. This includes losing your job or becoming unfit for work. It also helps pay the balance owing if you die. Getting credit card repayment insurance will give you one less thing to worry about because if you find it difficult to pay back your credit card obligations, then it can ease any financial burden to you and your family.

How does payment protection insurance work?

This depends entirely on the insurer, but you can expect a waiting period after you lodge your claim. Usually the insurer can pay up to double the minimum repayment until you are fit to return to work.

How much does payment protection insurance cost?

Different insurers will have different premiums and rates, please read the Product Disclosure Statement (PDS) for all the costs. As an example, HSBC's payment protection premiums are listed below. The premium is 69c per $100 on the closing balance. If you have $500 at the time, you will pay $3.45 for that month.

Closing balance at the end of the statement periodMonthly Premium
$0$0
$100$0.69
$800$5.52 ($0.69 x 8)
$1500$10.35 ($0.69 x 15)

As a second example, Westpac credit card payment protection costs 52 cents for every $100 owing on your card. The monthly premium is dependent on the balance owing on your credit card at the end of the monthly cycle.

Closing balance at the end of the statement periodMonthly Premium
>$0$0
$1000.52
$800$4.16 ($0.52 x 8)
$1500$7.80 ($0.52 x 15)

By calculating the potential cost of having payment protection insurance, you can determine whether this feature will be useful or not. If having peace of mind is worth the premiums you pay, then it may be a good idea to get payment protection.

What is covered under the payment protection insurance?

Again, each insurer will cover you for a different amount depending on the claims you make. Generally, the amount will be calculated on the balance you owe at the time and what type of claim you made. Most insurers will pay up to $50,000 if the cardholder dies. Here is what you can expect to be covered for:

  • Life events
  • Death of a partner or spouse
  • Redundancy/resignation
  • Disablement benefit
  • Accident death

Eligibility

This is also dependent on the insurer and their policies. However, as a general guide you need to be

  • Over 18 and under 65 years of age
  • Be employed on a part-time or full-time basis.
  • You may also need to be a permanent resident of Australia or hold a valid temporary visa, as well as have no default on your credit history.
    Each policy will outline what employment status they require for you to be eligible for this insurance.

How do I apply for payment protection insurance?

There a few ways you can apply for payment protection insurance:

  • Call your credit card provider
  • Download an application form, available from your credit card provider's website
  • When you apply for a credit card, this is one of the extra features that you can choose to include

Credit card providers with payment protection insurance

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
ANZ Platinum Credit Card
0% for 17 months, reverts to 20.24% p.a.
20.24% p.a.
$0 annual fee for the first year ($87 p.a. thereafter)
Receive a 0% purchase rate offer for 17 months and a $0 first-year annual fee. Plus, complimentary overseas travel and medical insurance.
Citi Rewards Card - Exclusive Offer
21.49% p.a.
0% p.a. for 30 months
$49 annual fee for the first year ($149 p.a. thereafter)
Finder Exclusive
Save on interest with 0% p.a. on balance transfers for 30 months with no balance transfer fee. Plus, a $49 first-year annual fee and Citi Rewards.
Citi Clear Card
0.9% for 15 months, reverts to 14.99% p.a.
0.9% p.a. for 15 months
$99
CardProtect from Citibank can assist with account repayments when you experience unexpected circumstances
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2 Responses

  1. Default Gravatar
    jillMarch 11, 2015

    I have been a carer for my husband for about eighteen months and don’t get any payments for this or work at all but have insurance on my credit card how can I start making payments on this card

    • Avatarfinder Customer Care
      JonathanMarch 11, 2015Staff

      Hi Jill, thanks for your inquiry!

      To allow me to assist you further could you please inform us to which credit card you are using?
      Credit card repayments can usually be made by visiting a local branch, BPAY, cheque or phone.

      Cheers,

      Jonathan

Credit Cards Comparison

Data indicated here is updated regularly
Name Product Purchase rate Balance transfer rate Annual fee
Citi Rewards Card - Exclusive Offer
21.49% p.a.
0% p.a. for 30 months
$49 annual fee for the first year ($149 p.a. thereafter)
Finder Exclusive
Save on interest with 0% p.a. on balance transfers for 30 months with no balance transfer fee. Plus, a $49 first-year annual fee and Citi Rewards.
Coles No Annual Fee Mastercard - Exclusive Offer
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$0
Finder Exclusive. Ends 29 October 2020
Save on new and existing interest charges with 0% interest on both balance transfers and purchases for the first 12 months.
Qantas American Express Premium Card
20.74% p.a.
$249
Enjoy 100,000 bonus Qantas Points, 50 bonus Status Credits and 2 complimentary Qantas Club lounge invitations per year. Ends 4 November 2020.
Citi Rewards Card - $500 Voucher Offer
21.49% p.a.
0% p.a. for 12 months
$99 annual fee for the first year ($199 p.a. thereafter)
Get a $500 e-voucher to spend at Myer, JB Hi-Fi or Coles when you spend $3,000 in the first 90 days. Plus, earn points with the Citi Rewards Program.
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* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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