Types

• Four types of credit insurance exist: credit life, credit disability, involuntary unemployment and credit property. Each type has certain terms and exclusions, limited payout periods and caps on how much each pays.
  
  

Advantages

• Credit card insurance can be canceled at any time, and sign-up is voluntary. Your credit rating is protected in case you become disabled or lose your job, and your credit card balance is paid in full if you die. People in bad health who carry large credit card balances may find the most benefit from carrying credit insurance.
  
  

Disadvantages

• All types of credit card insurance usually get lumped together in one policy, so people may pay for insurance products they don't need or already have. Multiple credit card holders will need to purchase insurance for each credit card.
  
  

Cost

• As of 2009, credit insurance premiums cost anywhere from 75 cents to $2 for every $100 of credit card debt, and monthly premiums are calculated based on your current monthly balance. Cardholders with extravagant balances will pay very high monthly premiums.
  
  

Warnings

• Credit insurance tends to be very difficult to collect, and minimum payments are made for a limited time. Some credit card telemarketers try to sign people up for credit insurance without their permission.