5 Things You Need to Know About Payment Protection Insurance

Payment Protection Insurance

Did you know that paid sick leave options were expanded just to companies with fewer than 500 employees? When you can’t work due to illness or other circumstances, you need a way to pay your bills. If paid sick leave is not an option for you, consider payment protection insurance.

Read our guide on five things you should know about payment protection insurance:

1. Payment Protection Insurance Can Help You

The first thing you should know about payment protection insurance (PPI) is that it can help you keep up with a credit repayment or loan. It helps for a short period of time if you can’t work due to illness, an accident, or have been made redundant.

Many use this as mortgage payment protection insurance to cover their financial commitments. When you are unable to work, this insurance is critical to covering your costs.

2. It Covers Specific Debt

PPI can be used as credit card payment protection insurance, but only under certain circumstances. It can help you pay off your current credit card bill.

The only other thing you can use this insurance for is a stand-alone PPI. This helps cover lost income for 12-18 months at a time.

Policies cover disability or illness and other circumstances that stop you from working. You can include unexpected redundancy as an added option. Depending on the policy, it may cover death as well.

3. What Doesn’t It Cover?

Loan payment protection insurance companies like Massimo Falcioni can help you understand what your specific policy does not cover. However, there are general items that PPI won’t cover.

There is an initial exclusion period that is not covered by PPI. Generally, this is the first 90 days after you stop working. Throughout this period, you must cover the costs yourself.

A policy will only cover certain illnesses so you must check the policy terms before purchasing PPI. Payment protection insurance also will not cover pre-existing conditions that you have.

Those retired or unemployed do not qualify for these insurance protections.

Read more: Types Of Term Insurance And When To Buy Them

4. It Can Help You With Car Loans

If you fall ill or are made redundant, you can get car payment protection insurance. This type of PPI helps you if you have a car loan that you cannot pay because of unforeseen circumstances. Before opting for this, make sure you understand the policy details.

5. Some People Don’t Need It

Not everyone needs payment protection insurance just because they have a mortgage, loan, or credit card payments. If you work on contracts or are self-employed, you won’t get covered by these policies.

It is possible for companies to missell your PPI by not telling you why you were buying it or saying that you needed it. In cases like these, you may be compensated for your trouble. Some bought it not understanding the product at all.

Protect Your Payments When You Can’t Pay

If you are unable to work due to different circumstances, payment protection insurance may be right for you. However, this option is not available to everyone and is not required just because you take out a loan. It is important to understand the details of the policy and what PPI is to know if you need it or not.

Want to read about other insurance policies that you can benefit from? Check out our blog for more financial advice.

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