Thursday, January 22, 2009

Retrenchment Insurance and Credit Card Shield for losing jobs

Upon reading the retrenchment benefits in Malaysia's context here, which exludes unemployment insurance or unemployment assistance dedicated to helping the unemployed, I stumbled this news that at least a thousand people have claimed the credit shield following savage job cuts in Dubai, XPRESS has learnt HERE.

Lots of expat workers in Dubai living on credit cards for whatever reasons. There is no retrechment insurance, therefore, this credit shield may assist a bit financially. It does work somehow in the UAE.

However, more retrenched expats leave their vehicle at the UAE airport before flying home for safety from debts and credits - HERE.

Interesting to read Frequently asked questions

What is credit shield?

It is an insurance scheme designed for customers holding credit cards to cover liabilities on their card during unforeseen circumstances. The insurance typically covers the age group 21 to 64 years. Some card issuers automatically enroll cardholders to its credit shield policy following a trial period.

When does credit shield work?

In case of death, disability and involuntary loss of employment.

How much does it cost?
Typically, it is less than one per cent [typically 50 to 99 fils for every Dh100] outstanding on your credit card monthly.

Documents to be presented by those terminated?
Termination letter, stating the cause. But credit shield won’t apply if termination was due to negligence or poor performance.

What is credit shield coverage for people terminated from their job?
Typically in the UAE, a credit shield will cover monthly payments due until the insured person finds a new job or up to maximum of 12 months [in some contracts]. Others don’t specify coverage period in case of disability or involuntary job loss.

What if I don’t pay my minimum payment due?
Where a cardholder’s “total minimum payment due” and any other amounts due and payable have not been paid for 90 days (as per latest statement), the credit shield will not apply and no benefit will be paid in this situation.

Credit shield advice

  • Credit shield, usually less than one per cent of balance, is an insurance against death, disability or involuntary job loss
  • To avail of its benefits, fill up a standard claims form and make sure you comply with the conditions of approval
  • If the policyholder is unable to find a job sooner, some insurers pay up to 12 months of the monthly installment.
  • In Western markets, there is usually a condition whereby cover is not available if the individual loses their job in the first six months of cover or if the company has announced, or is likely to announce, redundancies.
  • Some banks do not offer credit shield for 30 days after one reports the loss of job.
  • If you were laid off, read the fine print of your credit shield coverage and prepare the statements for the last three months prior to termination.

4 comments:

Pentilium5 said...

i dont think credit shield comphrensive here... yg i tau ada cover (a) permanent disabilities (b) death.

Termination of employment cover takde... one People's Bank (u know who) even goes one step further asking borrower to sign a will (so they can transfer the debt to the estate) but does not cover for the death, which i find it to be quite funny....

Pentilium5 said...

oh the will cost RM300 too....

immortal said...

That is Sweat... Although I do not have any credit card. I would love to hear more stories/ comments about this subject.

Luce said...

HI!
Thanks for your posting...
I have been working in Dubai for the past 8 years and I was made redundant in April, I went through my bank's papers and discovered my 3 credit cards were covered by the credit shield. In one bank they told me the credit shield didn't cover loss of employment since November, although I had that card since 2001 and then it was applying and I'm still paying credit shield till date and no information was sent to the customers, another bank was a very simple procedure, the other was hell, they were authentic dogs, still I paid all they asked me to, in order to apply for the shield. 3 months later and I'm back in my country and I still receive calls from the banks asking me to pay the minimum and when I tell them I applied they give me this cheeky excuse that it is still under process and if I don't pay the insurance company will decline...
What is this all about? Would you have any suggestion how I should tackle this... Do you think I would suffer any liability if I simply refuse to pay these?