|Accidental death insurance: common
as credit cards
Ever wonder whether you should
pick up some insurance before boarding a commercial flight, just
in case? Wonder no more: Chances are good you already have it right
in your wallet.
Each of the four major credit card
brands -- American Express, Discover, MasterCard and Visa -- offers
some form of what the insurance industry calls "accidental
death and dismemberment," or AD&D, coverage on some or
all of their consumer credit cards. Benefits vary by brand and card
type, and can range in coverage from $100,000 to $1 million.
If your card offers it, you are
automatically covered while traveling on what is called a "common
carrier conveyance," such as a commercial flight, boat, train
or bus, as long as you paid for your ticket with the credit card
that offers the coverage. Your spouse and dependent children traveling
with you might also be covered, as long as their fares were purchased
on a card that covers them.
The card companies began offering
insurance products as value-added incentives in the mid-1980s. You'll
usually find your AD&D coverage buried well down the list of
happier-sounding card member benefits such as purchase security,
auto rental collision-damage waiver and concierge services, and
for good reason.
"It's really hard to advertise:
'Please use this card, because you might die in a plane crash,'"
says Alice Droogan, global solutions leader for MasterCard
Recently, MasterCard scaled back
its coverage, based in part on focus groups that found that consumers
did not perceive AD&D as a particularly valuable benefit.
James Hamilton, senior vice president
of Chubb Accident and
Health North America, which underwrites MasterCard's AD&D
program, says that while the retrenchment may be due to changing
card member demographics, the card companies in general are retooling
some programs to recoup some of their costs.
"One of the shifts that happened
probably two years ago was the big players decided to say: You know
what? For the platinum card, you used to get $1 million in accidental
death coverage, move that down to $500,000 or $250,000, or in some
cases $100,000. There is some shift to offer the customer base the
option to buy up that coverage to the original $500,000 or $1 million
at a group rate and not individual rate, so it is extremely affordable,"
Although it might be the last thing
on your mind as you prepare for boarding, Hamilton says your credit
card travel accident coverage remains a terrific bargain in a worst-case
"AD&D is a fairly inexpensive
way to leave an estate behind," he says. "If it is a core
benefit at no charge to you, it would be the smartest thing you
In the event of death or dismemberment,
here's a general guide to coverage by card brand:
American Express offers two levels of coverage for card members,
their spouses and dependent children, depending on the card type,
at no extra cost to cardholders. If you hold the Green, Gold, Rewards
Plus Gold, Student, Senior Member, Blue, Blue Cash, Optima, Delta
SkyMiles, Hilton HHonors and Starwood consumer card, or the Executive
Business, Costco Business or Business Management Account from OPEN:
The Small Business Network card, you have $100,000 coverage in the
event of accidental death or dismemberment. If you hold a Platinum
or Centurion card, your coverage is $500,000.
Toll-free claims assistance: (800)
645-9700. AMEX Assurance Co., in De Pere, Wis., underwrites American
Express AD&D coverage.