What is a Credit Shield?
Credit shield is the waiving of the outstanding balance on your credit card if an unforeseen situation arises. Those situations include accidents and hospitalisation, permanent disability, involuntary loss of employment and loss of life due to causes specified in the policies. You can opt for a credit shield by paying a fee which is a certain percent of your outstanding balance every month. The banks act as distributors of credit shield which is provided by the insurance companies to the credit card owners.
It solely depends on different banks whether or not they offer all the benefits, namely Hospital Cash Benefits, Death Claims, Permanent Disability Claim and Involuntary Loss of Employment Claim. Make you find out which banks offer a credit shield on their credit cards before narrowing down on one.
- While filing for a claim, furnish the bank with necessary documents, termination letter, hospital bills, doctor certificate for disability, death certificate, and a copy of passport with visa page(for expats) and National ID(Emiratis) among other documents as applicable for your claim.
- Benefits are extended to primary cardholders and usually extend to additional or supplementary cardholders up to a pre-fixed limit.
- The benefits are not applicable if the cardholder has exceeded the specified coverage age.
- You should have paid the minimum amount due for 90 days before the claim or else credit shield will not apply.
- Typically, coverage period in case of loss of employment in the UAE is 12 months or till you find another job up to a period of 12 months.
- Your loss of employment has to be involuntary, and not due to poor performance for the credit shield to apply.
- Your coverage will start 30 days after you report your loss of job.
- Requisites for credit shield coverage for Loss of Employment can range from higher salary requirements to automatic salary transfer to the issuing bank.
- Approval of claims depends on the terms and conditions of the policy, and the authenticity of the claim.
- In the UAE, Citibank, First Gulf Bank, Mashreq Bank and Abu Dhabi National Takaful Co. (Takaful) cover Involuntary Loss of Employment, along with other benefits.
Why does it matter?
Credit shield is an optional cover, and can be valuable to protect you in unfortunate circumstances. Based on the above, you need to evaluate your current situation with complete honestly and then make your choice. Accordingly, choose the credit card that suits your requirements and read the policies of the agreement to make an informed decision.