How much money have Credit Protector Insurance programs defrauded their U.S. customers out of over the past 15 years?

On my website Credit-Protector, I estimated that Credit Protector is overcharging it's customers by a factor of ten.  Meaning that for every dollar credit-protector charges in premiums, they really should be charging ten cents!

I'm going to now guess just how much money the Credit Protector program has defrauded from it's customers. By defrauding, I mean charging several times more in premiums than will be paid back out  in legitimate claims. 

Ethically speaking, established insurance companies might pay out anywhere from  70 to 90% of all the revenue that they take in.  If an insurance company can't pay back out 70 to 90% in policy coverage for legitimate insurance claims, then they are charging too much for their services and could possibly be sanctioned, fined, or have their license revoked by various insurance oversight committees.

Enter Credit Protector insurance. Perhaps because each credit card companies monopolize their own credit card customers with their credit protector insurance, they may not feel compelled to actually offer a pay out ratio that is 70 to 90% of what they charge.

If we assume that the credit card companies are only paying out 5 cents per every credit protector insurance premium that they take in, we would assume that somebody would have stopped this basically fraudulent practice, but nobody has.

Lets further assume that only 1% of credit card customers are on the credit card insurance program called credit protector. Lets further assume that the average credit card debt is 5,000 dollars per insured.

Their monthly credit protector bill would be around 40 dollars.  

But keep in mind that that money spent on credit protector is not going towards paying down the credit card debt, so the higher monthly principle actually accrues higher and higher interest  charges.  But to keep it simple, we'll use 40 dollars per month times 1% of all credit card customers.

Assuming there are 150 million potential credit card customers, that means that 1.5 million customers x 40 dollars equals 60 million dollars a month are being spent on credit protector premiums. Assuming the 5% pay out of all premiums collected, that would mean that 3 million dollars out of 60 million dollars collected was spent on insurance claims per month.  Based on 60 million dollars collect per month at 80%, 48 million should be spent every month in claims, not 3 million.

I am estimating that in the U.S. Credit Protector insurance programs are collecting 45 million dollars every month that they should not be collecting.  45 million X 12 months equals 540 million dollars a year.

540 million dollars a year x 15 year equals 8.1 billion dollars worth of fraud over the past 15 years just from Credit Protector insurance in the United States.  

If we begin to factor in the overcharging causing people to not be able to pay down their actual credit card bill faster, thus resulting in higher and higher interest charges each month, plus penalties if the insurance put the person over their credit limit, I think we could double this amount to 16.2 billion dollars in overcharges to the american people in regards to Credit Protector insurance coverage over the past 15 years, or about a billion dollars a year!