Payment Protection Insurance Is It Worth While Considering It?
When you are in deep financial commitments and unable to match your monthly expenses
including your housing loan, kids education fee and monthly grocery bills and other kind of bills, you may be in a bad financial state. This may be a result of loss of job and you have no earnings at all. This situation will also arise when you are sick and have no sick leaves left, met with an accident and feel crippled.
In case you are protected by an insurance cover, you need not worry when there is such a situation. You will continue to pay your mortgage payments every month, repay your mobile bills, power bills and education fees etc. But, remember it is not mandatory to opt for this payment protection insurance along with your mortgage. You are at liberty to choose to take up this protection cover.
This covers accident, sickness and involuntary unemployment. When you are unable to pay your monthly bills in case you fall sick or have been laid off, you will be paid a portion of your income so that you can cover up these bills. Just in case they have mis sold a protection insurance, quoting that it is mandatory then you can claim back your money which has gone into payments of insurance premiums. This cover will pay you as long as you get back to work or find another.
What all does this protection cover you? It can cover repayment of personal loans, credit and store cards, car loan, debts and housing loan too. You can take a stand alone policy later when you feel the need for being protected. Or else apply for it when you apply for your loan itself. Think over it, as your payments will be high when you take out a loan as well as its protection policy.
Payments for PPI are exempt from tax and are normally paid for an agreed period as defined in the policy. The exact amount paid will also be defined in the policy but it could typically be anything up to 75% of the total income.
At times of financial difficulty, having a PPI on money borrowed means that policyholders can claim on their insurance if they cannot keep up with their monthly repayments. The money received from the insurance can be used to cover the costs of bills and outgoings. Do not heed to any mis selling of policies you have a choice to apply or not to apply!
by: Kirthy Shetty
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