Payment Protection – A Must Read Article for Everybody
Payment Protection Insurance (PPI) is a loan that is provided to cover a debt that is presently outstanding. It is an insurance product in the form of loan or an overdraft, and is commonly sold by banks, insurance companies and other credit providers as an add-on to the loan or overdraft. The credit providers offer this loan to you if you are unable to pay some debt on time due to financial crises.
Payment Protection Insurance is at times also known as Credit Protection Insurance or Loan Repayment. The suppliers of this insurance can vary slightly however, Payment Protection Insurance covers a person against an accident, unemployment, illness or death. All these are circumstances that may be a reason for preventing a person from earning a salary by which they can pay their debt.
This insurance usually covers a minimum repayment against the loan or overdraft for a particular period, if all the appropriate criteria are met. Normally this time lasts for about 1 year or so. After this time, the person must find some other sources to repay the debt. Normally people are able to find or start their work again by this time so they can repay the debt themselves.
Payment Protection Insurance though helps to repay your debt at the time of crises but obtaining it is not an easy job. You can assess if you need payment Protection Insurance by pondering over a few things. You should decide whether insuring your loans is a necessity for your lifestyle.
For example if you are old or very likely of getting an illness; if you have a large family to support or if your financial conditions are quite stressed, then you have a need for payment protection Insurance. If you are self-employed, then there is no point in taking PPI. Even if you are working part time or are suffering from any sickness, then you should not go for Payment Protection Insurance since it is likely that you would not be able to repay your debts even after the period for PPI is over.
If you have any illness like cancer and you are hoping to get PPI, then it is needless. Lenders are aware of the fact that these diseases can be diagnosed and treated much quicker than in the past and they are reluctant to offer the loan. So the diagnose would not definitely end up in getting you this loan.
Before deciding whether you need a Payment Protection Insurance, you must check on your company’s policy regarding long-term sickness. Many firms and companies pay you salaries in case of serious sickness. Furthermore, some of the larger companies have schemes under which they pay you your salaries for as long as 6 months.
In such a case, you would not need Payment Protection Insurance to repay your debts. Moreover, if your spouse or partner is earning well and can support you while you are sick, then again you do not need a PPI. Although PPI is very useful when you are in crises, before taking it, you should rationally decide if you need it or not. Not only is it difficult to get it, PPI Claim also does not come cheap.
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