If Rebecca Anderson had died by falling down an elevator shaft, Citi Group would have made good on its promise to wipe clean all her credit card debt. The company also would have come through if she'd been hit by a bus.
But Anderson died suddenly from a heart complication, and Citi ruled that because this was a "natural death" and not an accident, it wasn't covered by the credit protection program Anderson had paid for in case of her untimely demise.
"I could understand if they won't cover you if it's a suicide," Anderson's daughter, Kara Schmidt, told me. "But what they seemed to be saying was that if you suddenly drop dead, you have to be the right kind of dead."
Yup, that's pretty much what they were saying.
Credit card protection is a form of insurance to cover yourself in the event of unforeseen setbacks such as a job loss, disability or, yes, death.
Card issuers typically charge a percentage of whatever balance you're carrying, and in return they say they'll make sure you don't run into trouble - such as racking up late fees or getting your credit score dinged - if you start missing payments.
In Citi's case, the company's Payment Safeguard Classic program costs cardholders 85 cents a month for every $100 of credit they carry on their balance.
Among the benefits, according to Citi's website, is that your balance will be will be wiped clean "in the event of Death and after 24 months of Job Loss or Disability."
This can be a way of protecting loved ones. If you die with a balance due on your plastic, your estate is still responsible for paying off the debt. In some cases, your spouse could be left holding the bag.
So Schmidt, 30, who lives in Grantsburg, Wis., was pleasantly surprised while recently getting her mom's financial affairs in order to see on one of her Citi statements that she had been enrolled in Payment Safeguard.
Anderson had a balance of $3,763.28 at the time of her death at age 54.
"That might not sound like a lot," Schmidt said. "But $3,000 is a lot of money for us."
She went to Citi's site and clicked on a link for what to do in the event of a program member's death. This brought up a "death benefit form" requiring information about the deceased and a certified copy of the death certificate.
Schmidt submitted everything Citi requested. A few weeks later, she received Citi's response in the mail.
"The program Terms and Conditions specify that the death must be the result of accidental injury that occurred within 90 days prior to the date of death," it said. "The death was not the result of an accidental injury. Therefore, the benefit cannot be activated."
Schmidt scoured Citi's site and could find no mention of such a limitation. She searched online and found a column I wrote in 2011 about problems related to Citi's Credit Protector Program, an earlier version of Payment Safeguard.
One of the issues I discovered at the time was that you weren't even shown the terms and conditions until after you signed up, which hardly seemed fair.
Schmidt gave me a call. As we chatted, I also looked over Citi's site and could find no mention of the accidental injury requirement in outlining Payment Safeguard's death benefits.
And what do you know? There was still no link to the terms and conditions - the fine print of the deal. What you see is what you get.
"I've looked and I've looked and I've looked, and I couldn't find a thing that said it has to be a certain kind of death," Schmidt said.
Her mom's death certificate attributes the primary cause of her passing to ventricular fibrillation, which the American Heart Association calls "the most serious cardiac rhythm disturbance," preventing the heart from pumping blood.
It can be caused by damage from a heart attack. Schmidt said her mother had experienced cardiac trouble several years ago.
Ventricular fibrillation isn't an accidental injury. It's an unexpected medical emergency.
But it's certainly not self-inflicted and it's not the sort of thing most people could anticipate. It is, more or less, bad luck.
Which is what insurance is designed to protect against - particularly coverage that doesn't require a preliminary medical exam, as some life insurance policies do.
At worst, Citi's Payment Safeguard appears to be a particularly cruel bait and switch. At best, it's an egregious example of a business failing to adequately disclose important conditions.
Jennifer Bombardier, a Citi spokeswoman, told me the company no longer sells the Payment Safeguard Classic protection purchased by Anderson years ago. However, it continues to "service existing customers."
Bombardier said the coverage Anderson purchased covers accidental death but not "natural death," which apparently means any demise not involving a grisly mishap. I'm not sure I understand the distinction.
A piano falls on you and Citi will honor its obligations, but you have a fatal stroke and it won't?
In any case, it's unclear how well Citi discloses this. I repeatedly asked to see the program's terms and conditions, but Bombardier never sent them. They're only available online to cardholders after they log in.
It's also hard to understand why the next of kin of a cardholder wouldn't have ready access to the terms when submitting a claim. They clearly have a stake in the matter.
All that aside, I'm pleased to say Citi has chosen to do the stand-up thing.
"We understand that Ms. Anderson's children have experienced a heartbreaking loss and would like to forgive any outstanding balance on the account at this difficult time," Bombardier said.
I passed that along to Schmidt, who said she was grateful to have the problem resolved.
I encourage anyone with a credit protection plan to take a close look at their contract. Make sure the coverage you thought you purchased is indeed the coverage you have.
Hopefully Citi and others will do a better job of making sure their customers are informed - and will honor their commitments
If your pledge is to make good "in the event of Death," then that's all there is to it.
At least that's how it should be.
ABOUT THE WRITER
David Lazarus, a Los Angeles Times columnist, writes on consumer issues. He can be reached at email@example.com.
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