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Protect Your Future With Payment Protection

Mar 31, 2008
Payment protection insurance (PPI) can be taken out to protect your future against the unknown. No one knows what is around the corner. If you should become unable to work, you would be left struggling financially. Protection can be taken out to cover against becoming unable to work due to accident or sickness. It can also be taken to insure against becoming unemployed due to such as redundancy.

Payment protection insurance is a generic name for three types of insurance - mortgage protection, loan protection and income payment protection insurance. All three policies work by paying a fixed premium each month that is decided by how much you want to cover and your age. There will be a period of waiting which is usually between 30 and 90 days of being unemployed or unfit for work continually. Some policies can be backdated to the first day and they would then continue for between 12 and 24 months.

The cost of the insurance will vary depending on where you choose to take out the cover. While payment protection is usually offered alongside the loan at the time of borrowing, this can be the dearest option. Cover does not have to be taken out at the same time. You do have the option of being able to shop around for the policy independently. By shopping with a specialist in payment protection, you are able to make huge savings while at the same time buying a quality product.

The terms and conditions of all policies must be read to ensure you understand what you are buying. It is here where you will find when the policy begins and ends and also gives advice regarding exclusions which can be found.

If you have mortgage repayments to keep up with each month then mortgage payment cover should be given some thought. Mortgage protection would allow you to continue meeting your repayments. This means you would not be at risk of repossession. By getting behind on your mortgage by just a couple of months, the lender can take steps to repossess your home. If you cannot come to an agreement to repay the arrears and show that you are able to maintain your mortgage repayments you would be taken to court. Mortgage cover can stop this and is a far better way than relying on State benefits or savings. The State could provide help providing you qualify. To qualify you must be receiving income support. You must also not be living with a partner in fulltime employment or have savings over a certain amount. State help would only be for the first 100,000 of the interest part of the mortgage.

If you have loan or credit card repayments to make each month then loan protection could be suitable. This type of protection would allow you to continue meeting the demands of your loan and credit cards and ensure you do not get into debt. If you were to get into serious debt then the lender could ask the court to recover the outstanding debt by way of repossessing your belongings. You would also earn yourself a bad credit rating, which means it could be impossible to get credit in the future.

If you protect your income with income payment protection, you would still receive up to a certain amount of your lost income each month. This means that you would be able to continue living your current lifestyle and paying essential outgoings. It also allows you to concentrate on getting better or allows you time to find another job while having financial security.
About the Author
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of payment protection, income payment protection insurance and loan protection insurance.
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