If you have loan repayments to meet each month and fear that you might lose your income after coming out of work due to suffering from an accident, sickness or through redundancy then payment protection insurance (PPI) can give you an income each month so that you can continue meeting your payments and so not risk getting behind and into debt.
You do however have to make sure that a payment protection insurance policy would be suitable for your needs and this can be done by reading the small print of a policy and the key facts. All payment protection policies have exclusions within them that could mean you would be ineligible to make a claim. Usual reasons include only being in part time work, suffering from an illness which you have had within the last 2 years, or being retired. It is essential to check with providers as to the terms of the individual policies, as they can vary slightly from provider to provider.
Once you have decided a payment protection insurance policy would be suitable then you would pay a monthly premium for the cover which is quoted on your age and how much you want to insure against each month. The cover would begin to pay out once you have been out of work for a pre-defined period of time which depends on the policy terms and can range from the 31st day to the 90th day and would be backdated to day one with the majority of providers. You would then have a tax free income for up to 12 months and with some providers this extends for up to 24 months which is usually more than enough time to get back on your feet again and back to work.
Sticking with standalone providers in payment protection will ensure that you get the cheapest premiums along with the information and key facts of a policy so that you can decide the products suitability before you buy what could be peace of mind and security and stop you from getting into debt.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of payment protection insurance, loan protection insurance and income protection insurance.
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