The answer to the question of whether credit insurance is overpriced depends whether you are looking at it as a whole or whether you are looking at it in terms of what other credit card issuers are charging. Even if your credit card issuer charges more than that of another issuer, you have to look at the benefits that are part of the package before drawing any conclusions. For example, Credit Card Issuer A may only charge 1.5% for disability insurance but requires that you be out of work the usual thirty days but will only pay for six months, whereas Credit Card Issuer B charges 4%, still requires a thirty-day wait but pays for one year. You need to consider these things before you determine that your credit card issuer charges too much for credit card insurance, and as such, make the decision not to purchase it.

Credit card insurance is an open market, and you have to remember that the credit card companies themselves are not financing the insurance, but are contracting with an insurance company to provide the benefits. Because of this, there is going to be a fluctuation between different credit card issuers because they will be using a different insurance company in most cases. Even if they use the same company, there may be different reasons why rates are different with credit card issuers, one of the most likely be the amount of participation. One of the rating factors that insurance companies use for premiums is the number of participants in a group, meaning the more participants, the lower the rate will be. This is why group rates for any kind of insurance are lower than that of an individual policyholder. The amount of claims is also a contributing factor, which may be another reason different credit card issuers have different rates for credit card insurance.

Before making a decision based on the rates your credit insurer charges, make sure you consider all of the possibilities and look at what the future may hold for you if for some reason you need the insurance and it is not there. Remember, once you become ill or injured, you cannot suddenly decide to take the insurance in order to cover that incident. The insurance must be in force prior to the incident in order for it to be covered.