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When you apply for a credit card, you may have been asked by the provider if you would like to add credit card insurance to your account. If you were not initial asked during account sign up, the question may arise when you activate your new card or by a random phone call from an account representative. Credit card insurance may be portrayed as a must-have service but you should consider whether it is really necessary for you.

What Is Credit Card Insurance?

Traditional credit cards almost always come with consumer protection from fraudulent activity or lost cards. Credit card insurance is additional coverage that is paid for by the card holder and goes into effect if you find yourself sick and unable to earn an income or if you suddenly lose your job. This coverage is even viable in the event of your death. While preparation for such unexpected events may sound like a wise choice, it is certainly worth your time to learn more about this additional service.

There have been many reports from consumers that did become sick and when they went to file an insurance claim with their provider, they found out too late they were not covered for their illness. Essentially they paid for something that was ultimately no use to them. It is your responsibility as a consumer to understand exactly what coverage entails and determine whether this coverage is right for you.

You May Already Be Covered

There are many people who are already protected from unexpected illness or job loss through their disability insurance or life insurance policies. Purchasing this separate coverage is a waste of time and money. For those that do not have existing coverage for life events, finding such insurance coverage may be a wise move before investing money into credit card insurance protection. Insurance provided by the credit card companies are not all-inclusive, meaning you are paying for protection on one credit card. With other types of insurance protection such as disability insurance, you are covering all of your financial bases.

If you have already looked into credit card insurance, you may find that overall coverage is not that expensive. Some costs as little as a dollar a month but some cards can exceed $100 a month. These expenses can quickly add up especially if you have to buy coverage for multiple cards. Consider the annual cost of such coverage and you'll likely discover it becomes unaffordable.

Watch for the Catch

Many credit card companies will offer free trial coverage for a month or several months. This trial coverage may not even be worth your time unless you can plan for serious illness ahead of time. Additionally, many programs result in automatic paid enrollment once the trial period has ended. Many consumers will forget to cancel before time and when they realize they are being charged for something they don't want or need, it can be a hassle to cancel the coverage. Representatives can be hard to deal with when you are not interested in services they are pushing.

Ultimately the choice to buy additional coverage is yours. You must consider your financials as well as your personal situation to make the decision. Check out other methods that are more reasonable and more affordable before signing on. The more research you do, the more educated a decision you can make. Don't succumb to the aggressive sales tactics of a credit card company when it comes to making such a choice. There are plenty of other options out there to be explored that may be much more financially sound than what they are trying to sell.

This guest post was written by Steve Dowell, a professional writer specializing in topics related to personal finance, debt relief, credit repair and more. Pass through ApplyForACreditCard.com for more tips and advice.

By Steve Dowell