Why Do Money and Insurance Go Together?

When it comes to money and corporations, those companies hold money very dear. So dear, that they insure it. This is true for risky business ventures, to regular mortgages, as well as credit card loans. Non payments on credit cards are usually charged off at around 180 days. Charged off simply means the deficient account gets written off the company’s accounting books. But what most people are not aware of, at around 90 days of non-payment, the company can file an insurance claim to offset that loss. The premiums were paid along the way by you, the consumer. You didn’t know about this, of course. But money ALWAYS gets insured.

So every account is insured. Once a default happens, the insurance kicks in at around 90 days. Then at around 180 days the account gets charged off the company’s books. This book keeping entry is reflected at the end of the fiscal year in the Profit and Loss statement. As a company, they can then deduct this loss from their taxes. THEN the charged off accounts get sold to third party debt collectors for pennies on the dollar.

So there is something else to think about.