Payment Protection Insurance
What is Payment Protection Insurance? Payment Protection Insurance provides helps to continue payments on loans or mortgages if you are unable to keep up payments due to accident sickness or unemployment.
Specific forms of Payment Protection Insurance Products include: Loan Payment Protection, Mortgage Protection Insurance and Mortgage Loan Insurance.
Payment Protection Insurance should not be confused with Unemployment Insurance, Income Protection Insurance, Critical Illness Insurance or Disability Income Insurance which provide you with a continued source of income in the event of long term illnesses or incapacitation. Payment Protection Insurance should be much cheaper but will only cover the payments of the specific targeted loans.
Benefits of Payment Protection Insurance? As well as providing some peace of mind, taking out Payment Protection Insurance may be a condition put on some borrowers for some loans. By reducing the risk to the lender, it may make the loan more attractive as a business arrangement and may allow lower rates.
Payment Protection Insurance Policy terms and cover vary. Typically you must be between 18 and 65 and be employed for at least 16 hours a week or be on a long term contract. There will be a period before you can make a claim, a period from the time a claim is accepted until first payments are made and a maximum duration for which payments are made - all these vary from policy to policy.
Payment Protection Insurance Premiums depend on your age, sex, occupation and state of health. You may need to have a medical before cover and premiums can be established. It is important to declare any issues that may affect the premiums - for instance all past illnesses and family histories should be declared - failure to do so may invalid the cover risking a reduced payout - even if you become disabled through an unrelated condition. You will not be eligible for cover if you are aware of impending redundancy.
Shop around for best terms and rates before agreeing a policy. Beware of high rates that are charged against the debt the policy supports - over the life of the debt the costs may be extortionate.
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