Chase is killing its credit card protection policy, but not soon enough for a 95-year-old woman who will lose $16,000 she's already paid in premiums.

The bank's long-running Payment Protection plan charged a fee every month based on your balance. In the event you die prematurely, the policy would then take care of your balance up to $25,000.

Of course, the reality is that if somebody dies with just debts and no assets, it gets written off by the credit card company anyway. So the joke they were playing was on the consumers who bought this rip-off insurance. It's just about the worst insurance in the world.

David Lazarus of The Los Angeles Times  recently wrote about a 95-year-old woman who paid $16,000 in premiums to cover $25,000 in credit card debt. It's very unlikely she'll get that money back now that the program is going away. And again, her heirs wouldn't be responsible for her debt upon her death anyway.

Credit cards are not the only place where you're likely to see pitches for what's called "croak and choke" insurance. If you have a mortgage, you get pitches repeatedly for mortgage life insurance. A mortgage life policy insures the bank gets paid off on the mortgage if you die early, instead of money going to your heirs. It's a complete and total rip-off.

The worst part with mortgage life policies is the bank offers them as some kind of peace of mind...but at what cost? They charge a premium that is 10 times the cost of real insurance you could buy that would let you name beneficiaries to get money after you die.

So the moral compass of the big banks is broken. You're the one who has to see through their phony offers and never get taken. It's your wallet. Don't let them seize it.

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Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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