More Indians are using credit and debit cards than ever before, but few are aware that some cards come with various types of insurance. These include personal accidental death insurance, lost card liability, loss or delay of check-in baggage, loss of travel documents, and emergency overseas hospitalisation. The coverage limit depends on the type of card you have and the credit limit available to you.
For example, HDFC Bank’s Platinum debit card offers up to ₹3 crore of international air accident cover, as does its Infinia credit card. State Bank of India’s Pride debit card offers ₹4 lakh coverage in case of death in an air accident, and ₹2 lakh for other accidents. The figures for its Platinum debit card are ₹10 lakh and ₹5 lakh, respectively.
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Remember, almost all death coverage through credit and debit cards is for accidental and not natural death, insurance through a card is no substitute for a regular term plan. However, this complementary insurance can provide extra cushion for your family in the worst-case scenario, so make sure you take all the steps you need to be eligible for it.
Know the terms and conditions
Simply owning such a card is not enough – you also need to fulfil certain conditions to stay eligible. For example, the card must be active – that is, it must have been used for at least one transaction a certain number of days (specified by the bank) before the date of accident, or for a certain number of transactions in a year.
With some cards, you’re only eligible for air accident death cover if you bought the ticket with that card. Similarly, to be eligible for travel-related coverage such as loss or delay of baggage, the ticket must have been bought using the card.
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“Each bank may have additional terms and conditions. For instance, the card must have been used in the past 30-60-90 days; and it must not be in default (all payments must be up to date). Some cards may not cover death by suicide, terrorist attack, etc,” said Samit Singh, founder, Happy Retirement.
“If you have two cards from the same bank, it will accept the claim only under one card, usually the one with the higher limit,” he added.
Don’t forget to appoint a nominee
The bank may or may not ask you to fill in the nomination form, so enquire about it yourself and make sure to do it after getting the card.
But what if you don’t do this? Can your family still claim the death cover? “In the case of a debit card, the insurance company may give money to a joint holder or to a nominee mentioned in the linked savings account. In case of a credit card, if there’s no nominee, the insurance company may want to see a court decree of who are the legal heirs,” said Singh.
How to file a claim
If something happens to you and your family has to file a claim, they should do so within 30 days of the incident. There’s also a time limit to submit documents after filing a claim, so check with your bank. It’s 60 days in the case of HDFC Bank and 15 days for Bank of Baroda.
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Bobcard’s most important terms & conditions (MITC) document reads, “All insurance-related queries/claims to be sent to [email protected] within 30 days from the date of customer’s death. If the claim is not reported to BOBCARD Limited within 30 days, the claim is not admissible. Documents to be submitted further in 15 days of claim intimation date. If document is not submitted to BOBCARD within the above time period, the claim is not admissible & will be declined/rejected by insurance company.”
Needless to say, the total coverage will be adjusted against any pending dues on the card before the insurance company releases it to the nominees.