Payment protection insurance is a type of credit insurance that helps you pay off your outstanding debts whenever you are rendered unable to due to reasons such as sickness, accidents, redundancy, termination and sometimes, death. If you're a policy holder and in need of payment protection insurance, what you should do is file an insurance claim and in about four months, payment protection will be paying off your debts, provided of course that your claim gets approved. Payment protection will then make payments for you usually lasting for twelve or twenty-four months. So, the insurance will be paying out for a year or two. This is ample time for you to recover from sickness and injuries or get another job that will be able to substantiate your debts.
When applying for payment protection insurance, make sure that you are really in need of it for applying for one may not be in your best interest. If your job is stable enough and provides for sick leaves, payment protection may only be an added weight on your monthly credit bills. Why would you need payment protection when the benefits you'll be getting from your job is enough to cover your obligations?
Also consider the amount of your debt and the time that you want to have it done. If your debt is small and you want to settle it quickly, then you might not need payment protection insurance at all. If your debt is of a lump sum amount however, then you might want to think twice about getting PPI . The thing about payment protection insurance is that the interest rates and the premiums are priced higher compared to other insurances. There have been reports wherein the price of the premium has reached over 50% of the original loan. So, if you have a loan of five thousand pounds, would you really like it to skyrocket to seven thousand five hundred pounds? Of course you don't right?
If ever you would like to avail of payment protection insurance, remember to review every provision and terms found in your policy. There are quite a few exclusionary clauses that may be in small print for these contracts. Usually, when you have a medical condition that you knew about when you applied for the insurance, you will be rendered ineligible to make a claim in the future. Being out of work or self-employed falls under the list of exclusions as well. Plus, even when you are eligible to make a claim, there are other factors too that may disqualify you from being approved an insurance claim. If you are terminated in the first one hundred twenty days of the policy, your claim will most likely be rejected. This goes the same for pregnancy, illnesses that you knew about whether diagnosed medically or not, redundancy due to a criminal action or misbehavior and other factors.
There are a lot of things wherein payment protection insurance might not pay out so make sure that you discuss this thoroughly with your credit provider. Financial firms advise us to get our payment protection insurance policy from a company independent of the credit company we originally purchased our credit product from. So we buy the credit product from Company A and the policy is acquired from Company B, who is in no way related or associated with Company A.
In availing of a payment protection insurance policy, make sure that you review every provision and term written on the contract - even the small prints - before you sign anything. It may be both meticulous and tedious but it will surely save you money and deliver you from scams and rackets.