Why pay insurance if it doesnt cover u

Hi there ..to start off with i had a account with woolworths and it was going good so i lost my work on the mine and i contacted them and told them i got retrenched at work .i did not make any payments on the account for i think about 7 months because of the company that I worked for was under business rescueand then got liquidated ..i owed woolworths about R5600 and when i eventualy got some money from the company i gone and payed R7000 on my account wich means i payed in way more than i was supposed to pay so 2 months after the payment i made i went to woolworths to request a new card because my wallet got stollen with all my cards they told me i cant get a new card because my account is blocked ...i just want to know why pay for insurance on the account when it doesnt seem to help even when u get retrenched and now what is Going to happen with the money i payed in extra on my account ..