Debit cards often come bundled with various insurance coverages as a value-added service. These benefits may typically include accident insurance, and in some cases, even travel insurance.
With the advent of UPI, RBI data shows that debit card payments have remained sluggish in the last few years. However, some of us may not know that certain insurance benefits come with a debit card. Accident Insurance is the most common coverage, offering protection against accidental death or permanent total disability. Some cards may even have air accident insurance if the air ticket was booked through the debit card
The coverage amount can vary significantly depending on the card type and issuing bank, with premium cards offering higher coverage. The coverage amount and terms vary, and cardholders need to understand the specifics of this insurance, including any exclusions and claim procedures.
Another kind of insurance or protection available with debit cards is the purchase protection cover which provides coverage against the damage or theft of items bought with a debit card, usually extending for around 90 days from the purchase date. This normally excludes perishables, jewellery, and precious stones.
“Though more common with credit cards, some premium debit cards also offer travel insurance, which may cover lost baggage, flight delays, and other travel-related inconveniences,” Adhil Shetty, CEO, BankBazaar.com said.
“These benefits may require activation in the form of threshold purchases or ATM withdrawals. The specifics of how these insurance covers work, including claim procedures and terms and conditions, will be outlined by the issuing bank. These may also be valid only for a specific period and may be discontinued by the issuing bank,” Shetty said.
One advantage of debit card insurance coverage is its complementary nature, requiring no additional application. However, the process of claiming these benefits can differ based on factors like card type, issuer, and the specific coverage provided.
Typically, insurance coverage is established through an agreement between the card issuer and an insurance provider. To access the benefits, adherence to the terms and conditions outlined in this agreement is essential. This may involve fulfilling requirements like submitting necessary documents (e.g., a police report for a personal accident) within a specified timeframe.
Therefore, it is imperative to carefully read and comprehend the terms and conditions of your debit card insurance coverage before initiating a claim. The procedures for claiming benefits may vary not only between different cards but also among various providers.