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Payment Protection Insurance Can Be A Lifeline To Keep You Afloat

Mar 31, 2008
Payment protection insurance (PPI) is an umbrella term that is used for loan payment protection, mortgage protection and income payment protection insurance. All three policies can be taken out for a premium each month. They will safeguard against the possibility that you might find yourself unable to work. This could be through suffering from an accident that leaves you incapacitated, illness or if you should become unemployed by redundancy for example.

Typically the premium will be based on how old you are at the time of applying and how much you wish to cover. However, this can vary greatly. The cheapest quotes are given with a specialist independent provider of payment protection. While the high street lenders will usually offer the dearest quotes.

All types of payment protection insurance will provide the policyholder with a monthly income that is tax-free. The policyholder would have to be unable to work or be unemployed for a period before the policy would begin. This will usually be between 30 and 90 days. Some providers can backdate the cover to the very first day of becoming unemployed or unfit for work. Once the individual has started to benefit from the policy, it would then continue to provide security for between 12 and 24 months.

Loan payment protection insurance would give an income that would allow the individual to continue meeting their loan or credit card repayments. This would mean they would not fall behind into debt and earn a bad credit rating or even worse. A policy would allow the individual to relax and recover from illness or would enable them to find another position, knowing they would not be struggling each month.

Mortgage payment protection insurance (MPPI) allows the policyholder peace of mind when it comes to ensuring that their mortgage repayments can be kept up. If the homeowner were to get behind by just as couple of months then the lender could seek repossession of the property. Relying on any savings or the State to step in and help is definitely not a good backup plan. Any savings you had would soon deplete and you have to qualify with the State to receive any benefit from them.

Even if you were entitled to receive State-aided funds, then you would have to wait for up to several months if you had taken out your mortgage before October 1995. After this period, you could then receive help for up to the first 100,000 of the interest part only of your mortgage. With this in mind you can see why considering mortgage cover is essential.

Stop and consider how much you payout each month in essential outgoings. If you were to lose your income, how would you manage to carry on staying financially afloat? Income payment protection insurance would supply the policyholder with an income to replace their lost one, up to a certain amount. This would allow the individual to continue paying essential bills and would mean they would not have to change their lifestyle too much.

Checking out payment protection insurance with an ethical standalone provider is essential. This will ensure that you get the cheapest quotes and best quality insurance possible. It will also allow the individual to check the terms and conditions and check out any exclusions which can reside in the policy.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of payment protection insurance, mortgage payment protection insurance and income protection insurance.
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