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Generally no, unless you think you can handle all that is involved with card insurance. Before making such a drastic decision, it’s wise to sit down and measure all the factors involved. Are you at such a place in your life where you think it’s necessary to protect your credit card in an unforeseen situation?

An introduction to credit card insurance will show there are four kinds. These fall into the categories of involuntary job loss (more and more a problem with today’s troubled economy), disability, critical illness, and Life or AD&D (which stands for “Accidental Death & Dismemberment.”) In the last case, if you should die in some unseen way (i.e. car crash or whatever), your credit card balance will be paid, potentially a big relief to your loved ones left behind.

When it comes to “involuntary job loss” (surprise! The job you’ve had for 20 years has just been outsourced to India; time to search the classifieds) credit card insurance offers to pay your monthly minimum payment for a select time. However, this isn’t because your boss fired you for a poor performance; involuntary job loss comes down to losing your job either through layoffs or downsizing.

The same goes with disability coverage with credit card insurance. Your monthly minimum payment will be covered for a specific amount of time, if a disability gets in the way of you doing your job. The coverage will not last, forever, though (be warned).

Lastly, with critical illness, the plan is nearly identical. You are covered through monthly minimum payments for a select time span. Once that span has ended, then you are back to making regular payments again, if you can afford to do so.

Typically these are small costs you make towards the credit card insurance. Small, as in starting with prices below a dollar, per $100 of your outstanding balance on a monthly basis. That can seem slight and almost trivial, but like everything, it all adds up over time.

So if you find yourself weighing the pros and the cons of credit card insurance, keep one rather vital fact in mind:  that with the exception of Life/AD&D, none of your balances are guaranteed to be paid off. Meaning that even if you find yourself unable to walk in a wheelchair with no source of income, your credit card issuer will still be demanding some kind of payment.

Sometimes, in worse case scenarios, the balance even raises. This is due to card and policy itself, but sometimes you will find yourself hopelessly stuck with a bigger number than you signed up for.

Before you make any decision with credit card insurance, be sure to know the policy with the card inside and out. Also be aware of the coverage you already have and if it is, indeed, cost effective to take up this new insurance.

Other questions to ask yourself regard the terms under which you can cancel the policy (these things happen!), are you really insurable and any other terms and conditions that are involved.

Once you’ve put all those matters into perspective, then you can decide if credit card insurance really is a necessity in your life.