How Payment Protection Insurance Could Help You
By Simon Burgess
There are numerous reasons why you might be able to benefit from taking out one of the payment protection insurance policies. Imagine for a moment that you have a large mortgage to pay or pay out a lot each month in loans. How would your manage if you suddenly became ill, suffered an accident or lost your job to redundancy?
The suite of protection policies against all of these occurrences would supply you with the much needed money for you to be able to continue meeting the demands of your outgoings. Your circumstances would all depend on the type of policy that would be most suitable?
If you have a mortgage then mortgage payment protection insurance would ensure that you have the money needed to be able to pay your repayment each month. A policy can make all the difference between you losing your home if you were to fall behind into arrears and keeping it. Lenders will take you to court to seek repossession of your home if you cannot make an agreement to repay the arrears while continuing on with the mortgage. With a policy to fall back on you would not have the worry and would be able to continue meeting the demands of the repayments without any problem.
If your main concern is loan repayments or credit card repayments then loan payment protection insurance could help you to avoid court action. Lenders can take you to court and this could mean you would gain a County Court Judgment against you. At the very it would affect your credit rating and this would mean you could struggle to get credit again in the future.
Income payment protection means you can insure up to so much of your income each month and then use this to continue meeting all of your outgoings. You would be able to pay mortgage outgoings, loan repayments and keep up with all other essential outgoings such as utility and food bills that help to keep your head above water.
All payment protection insurance policies work by paying a premium each month. If you choose to take your policy with a standalone payment protection specialist then the premiums will work out cheaper than tagging on the protection at the time of borrowing. Some providers will payout on their policies from the 30th day of becoming unemployed or of being incapacitated and other could ask you wait as much as the 90th day before claiming. All protection would payout for a certain length of time and the stop. Usually you can take out cover that supply between 12 and 24 months tax-free income. Policies are more viable ways of protecting your outgoings than relying on any savings you may have or the State to provide you with an income. State benefits often let people down and even if they are eligible to claim, only pay towards the interest part of the mortgage. You also might not receive enough to continue meeting loan repayments and all other essential outgoings on the little that the State provides.
About the Author: Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of payment protection insurance.