What You Need To Know About Payment Protection Insurance
Payment protection insurance or PPI is an umbrella term for policies related to payment protection for loan, income or mortgage payment
. It was developed to provide repayment cover for people who are unable to do so due to illness, accident or similar. Here, we learn more about this insurance type and how you can take advantage of it.You must start by understanding what payment protection insurance entails. These policies provide a tax free financial bailout of sorts for people who are unable to work owing to severe illness, injury or involuntary redundancy. The money may be used for payment of various existent financial commitments such as disbursement of outstanding amounts on mortgages, loans or credit cards. Some policies also offer adequate funds to cover certain living costs as well. So if you"ve been unable to earn a salary owing to a physical crisis, you can use this insurance to tide you over the hard times.
Once your application is approved, the insurance will repay your debt for as long as needed for you to recover. The insurance can be broken down into three categories including credit life insurance, credit disability insurance and unemployment income insurance. If a person with credit life insurance is deceased before an entire loan amount is repaid, the insurance will pay it for him/her. Similarly, the disability version of the insurance will pay off any loan in case the insured is rendered disabled for any reason. The unemployment income insurance will provide financial cover for anyone left without a job.
You may buy any of these insurance policies as stand-alone covers. However, accident cover is generally sold along with sickness cover and may not be available separately. Because there is a certain amount of risk associated with the unemployment insurance cover, you may have to pay a higher premium as well.
You can choose the duration of the cover in accordance to how long you want the benefits to be payable after making a claim. Typically, this varies from one company to the next and most often, the cover is available for a period of 12 months. Some companies do offer insurance for up to 24 months as well. However, this insurance is most appropriate for people looking for a short term solution to their financial problems in case of a crisis. It is not suitable for individuals with long term disability or illnesses.
There are several reasons why this insurance is a good policy to obtain. For starters, it will protect your credit rating by ensuring that your loan or credit card bills are paid on time "" even if you"re ill or disabled or without a job. Also, other than providing financial relief, the policy has a 30 day obligation free trial that allows you to decide whether you want to keep the policy. If you believe it isn"t right for you, you can easily cancel it and get back any premiums you may have paid.
Should you decide to apply for the loan, you can do so by getting in touch with independent suppliers or other financial institutions such as banks for the same. Most of these lenders have online application procedures that allow you to apply and get an approval within the shortest period of time.
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