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Executive Travel : Plane Crash in Indiana Calls Attention to Life Insurance : Protection: Sometimes compensation is a credit card purchase away.

November 03, 1994|From Reuters

Disasters such as this week's plane crash in Indiana and the one near Pittsburgh in September leave many business travelers dealing with a fear they'd like to keep packed away.

It also focuses attention on a closely related issue: life insurance.

Some travelers may not realize or may have forgotten that they already have an extra layer of insurance protection--in some cases amounting to hundreds of thousands of dollars--triggered automatically when certain credit cards are used to buy airline tickets.

American Express, for example, provides $100,000 of in-flight accidental death and dismemberment coverage at no extra cost on personal green and gold cards and on corporate cards used by smaller companies--provided the airline ticket was charged on the card.

The amount goes up to $200,000 on corporate cards used by mid-size and large companies, again when the ticket is charged. A spokeswoman said the larger corporate accounts also get 24-hour protection in the air and on the ground.

"If you slipped on the ice on your front steps en route to the airport, that's still covered," she said.

Diners Club, which has more than 6.4 million cards in circulation worldwide, says its insurance coverage--also automatic when the card is used to pay for a ticket--is broader.

Diners Club offers high insurance: $350,000. President Robert Rosseau said the company is aware when a victim of a disaster was a cardholder and that in such cases, "we typically won't wait for (families or estates of the victims) to contact us about it."

"As long as we're absolutely sure there's not a mix-up of names, we would go out . . . to try to get people the money," he said.

"That is entirely different from the industry. Like most insurance companies, people tend to wait to see if you're going to make a claim, or if someone even knows that there's a claim in this area," he said.

The Diners Club casualty insurance coverage is also in effect when members are using frequent-flier awards to fly free.

The Discover card offers some of the highest in-flight protection in the industry, paying out $500,000 for death occurring due to a plane accident. The insurance also covers dismemberment; benefits vary with the severity of the injury.

Even with credit card and employer-provided life insurance plans, there is always the option of buying even more coverage from the card companies and elsewhere, including at airport booths.

Some consumer groups have suggested that per-trip insurance plans covering only in-flight accidents may be a more expensive way to go compared to, say, a basic term-insurance policy that would offer year-round protection.

But spur-of-the-moment add-on insurance protection remains popular. Tele-Trip Inc., a subsidiary of Mutual of Omaha and the largest provider of insurance in airports, says 50,000 of its policies are sold at self-service airport units in the United States every year.

Times staff writer Lauren Straub contributed to this report.

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