At the wake of 2016, financial institutions in India witnessed a phenomenal surge in the number of credit cards and debit cards. Traditionally, a country of debit cardholders, for the first time saw unprecedented growth in credit cards with as many as 48.9 million credit cards issued in the current Financial Year.
Consequently, the number of frauds related to credit cards and debit cards as well saw a rise over these years. A total of 911 incidents of card frauds have been reported in FY 2017-18 accounting for a quantum of Rs. 65.26 Crore. These incidents have prompted the Reserve Bank of India to change its norms and allow compensation for any losses suffered by a user due to unauthorised usage on their cards as reported to their respective financiers.
Beyond just the RBI, multiple financiers as well as third parties offer credit card insurance policies to benefit card users even more with additional financial compensation and terms of coverage.
The significant reduction can be attributed to a robust security structure and policies offered by. In certain cases, financial institutions suggest purchasing an insurance plan from a third party for better convenience.
In any case, it is imperative to purchase an insurance policy when availing a credit card in an age of rampant cyber-crimes such as phishing. It will allow you to avoid any significant financial burden due to loss or theft of your wallet as well.
What is a credit card insurance plan?
A credit card protection plan or insurance policy is an agreement between a borrower and a lender or third party; wherein, on account of loss, theft, or fraudulent activities on the credit card and subsequent misuse, the insurer provides compensation against such losses.
When theft or loss of a credit card comes into question, it seldom occurs in isolation and is almost always the entire wallet which is lost or stolen. To account for that, Bajaj Finserv provides Pocket Insurance & Subscriptions such as Wallet Care which also provides financial coverage for loss of other valuables such as PAN card, Aadhaar card, etc.
Features of a credit card insurance policy
When opting for a certain insurance policy or insurer, you should consider certain features which would allow you to make an informed decision regarding it. These are –
1. Coverage
The most essential feature of any credit or debit card protection plan is the extent of coverage provided on it. You should assess the market duly and see which financial institution provides considerable coverage against affordable premiums.
Additionally, check whether these policies financially cover incidents beyond theft or loss, such as internet fraud, etc. In some cases, there is a risk of identity theft due to loss or theft of vital documents such as Voter ID card, Aadhaar card, etc. You can also opt for an identity theft cover insurance policy to specifically cover costs pertinent to it.
2. Card blocking
You should see which financial institutions provide card blocking services on their credit card insurance policies. It will allow you to avoid any unauthorised usage of your card when it is lost or stolen. Also, see which financial institutions provide prompt services regarding card blocking and whether the coverage is extended beyond Indian jurisdiction as well.
3. Emergency financing
Certain policies also come with emergency financing, hotel and flight booking, etc. on account of the loss of wallet. It is a highly beneficial feature considering you lost your wallet during travelling, either in India or abroad.
These are a few standard features which most card insurance policies in India offer. The application process for such insurance policies is simple and can be accessed via your cell phone. Complete the application process with proper details and necessary documents. Pay the premium online to subscribe to a credit card insurance policy.