Does credit card holders are insured by credit card companies by default?

POSTED BY Ammu Kothandaraman ON August 29, 2012 4:22 pm COMMENTS (2)


I have query on clearing credit card pending debts after the credit card holder’s death.
My friend passed away recently and his wife informed the credit card bank which is standard chartered bank. they asked her to forward the death certificate and marriage certificate via mail which she did. Now she is been phoned and asked to clear her husband’s outstanding depts. He was holding a gold credit card and he was been holding that card for the past 10 years. Now, I would like to understand whether credit card holders are insured by default by the credit card companies. because I have heard that by default, all credit card holders are insured for some amount depending on the card category. If he is not insured, then is it the responsibility lies with his wife to clear the debts.

Please clarify

2 replies on this article “Does credit card holders are insured by credit card companies by default?”

  1. Dear Ammu, There are 2 types of covers for credit cards.

    1. if your card is stolen & you inform the bank/issuer, any transaction after your card lost report ‘ll not be charged to you.

    2. Some cards do provide accidental insurance free of cost. This free accidental insurance is very low for surface travel (read Train/Bus) & very high for Air travel.

    Other than the above covers everything else is on chargeable basis.

    So for the given query, yes the wife is liable to pay the dues on the card.



  2. Some credit cards do come with complimentary life insurance but the amounts are usually low (1-2 lacs etc.). Elite cards sometime cover upto 10 lacs for death during a travel booked by the same card. SO is getting insurance thru credit card a general thing? No

    Debtors have first right to money. So if there are dues outstanding the legal heirs are supposed to pay it back subject to money received from the deceased person. If CC has outstanding amount of 1 lac and the wife received 10 lacs from the husband by being a legal heir she mjust part with 1 lac as Debtors have first right on money. If the husband has not passed any money to the wife then the wife is not liable to pay a paisa to the CC company.

    In this context it is interesting to know that PPF amount cannot be claimed by debtors. If a person has 10 lacs loan outstanding and the only savings is PPF worth 15 lacs the debtors cannot cliam that amount!

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