You have probably purchased a car, a television, or other large-format flat screen TV with some form of credit, loan, credit card, or finance plan. In the past, you might have been offered an insurance plan that would cover your credit card repayments in case of financial disaster. This is what is known as payment protection insurance, or PPI.
What is PPI?
To cover all types of borrowing or credit, payment protection is readily available. You can purchase loan protection products that cover all types of credit, including bank loans, car financing, and credit cards. This type of coverage may have been available to you before you took out a loan or credit card. However, the Competition Committee conducted a lengthy inquiry into the restrictive practices of major banks and lenders in 2009. Independent suppliers have made it much cheaper to purchase payment insurance plans and premiums.
You can buy what is called Mortgage Payment Protection Insurance (MPPI) if you have a mortgage on your house. Although this plan is often less expensive, it will not cover your monthly mortgage payments.
There are many other protection products available. The most popular being those that protect your income or salary, also known as Income Payment Protection Insurance (or lifestyle cover). These types of insurance products do not require you to make agreed repayments. You can also spend the income benefits just like you would with your wages or salary.
What is PPI coverage for?
All payment protection products protect you from and will pay a monthly amount to protect your payments in the event that you are unable to work or suffer from an accident, sickness, or other unforeseen circumstances.
These can be purchased as separate covers. However, it is possible to purchase them alongside sickness coverage. These policies can be purchased as standalone covers, although you may also purchase coverage for accident and sickness.
The duration of the coverage depends on how long the beneficiary wants to receive the benefits in the event of a loss. The coverage period varies from one insurance company to another. Most often, it is for 12 months. However, some more flexible providers can offer up to 24 month coverage for a premium. This type of insurance is not meant to be a long-term solution for life’s problems.
Purchasing payment protection cover
It is worth shopping around for coverage, as there are so many options on the market. Online applications are easy to fill out for most independent suppliers. Usually, you will need to provide your age and the amount of benefit you want each month.
You will need to determine how long you want to wait before receiving monthly benefits. This is called an excess period. You will usually be offered periods of 30, 60, or even 90 days. The monthly premiums will be cheaper the longer you wait. You should look for companies that offer back-to-day one coverage. This will allow you to get back your claim as soon as the excess period is over.
It is important to compare payment protection plans so that you can find one that covers all your monthly expenses. There are many providers that have different limits so it is important to find one that covers all your monthly outgoings.
You should always check whether you are eligible for coverage, especially if you have payment protection.
