|
Welcome to Pay2Direct.com
Protect your future with payment protection
By : Simon Burgess
Payment protection insurance (PPI) can be taken out to protect your future against the unknown. No one knows what is around the corner. If you should become unable to work, you would be left struggling financially. Protection can be taken out to cover against becoming unable to work due to accident or sickness. It can also be taken to insure against becoming unemployed due to such as redundancy.
Payment protection insurance is a generic name for three types of insurance - mortgage protection, loan protection and income payment protection insurance. All three policies work by paying a fixed premium each month that is decided by how much you want to cover and your age. There will be a period of waiting which is usually between 30 and 90 days of being unemployed or unfit for work continually. Some policies can be backdated to the first day and they would then continue for between 12 and 24 months. The cost of the insurance will vary depending on where you choose to take out the cover. While payment protection is usually offered alongside the loan at the time of borrowing, this can be the dearest option. Cover does not have to be taken out at the same time. You do have the option of being able to shop around for the policy independently. By shopping with a specialist in payment protection, you are able to make huge savings while at the same time buying a quality product.
The terms and conditions of all policies must be read to ensure you understand what you are buying. It is here where you will find when the policy begins and ends and also gives advice regarding exclusions which can be found.
If you have mortgage repayments to keep up with each month then mortgage payment cover should be given some thought. Mortgage protection would allow you to continue meeting your repayments. This means you would not be at risk of repossession. By getting behind on your mortgage by just a couple of months, the lender can take steps to repossess your home. If you cannot come to an agreement to repay the arrears and show that you are able to maintain your mortgage repayments you would be taken to court. Mortgage cover can stop this and is a far better way than relying on State benefits or savings. The State could provide help providing you qualify. To qualify you must be receiving income support. You must also not be living with a partner in fulltime employment or have savings over a certain amount. State help would only be for the first £100,000 of the interest part of the mortgage.
If you have loan or credit card repayments to make each month then loan protection could be suitable. This type of protection would allow you to continue meeting the demands of your loan and credit cards and ensure you do not get into debt. If you were to get into serious debt then the lender could ask the court to recover the outstanding debt by way of repossessing your belongings. You would also earn yourself a bad credit rating, which means it could be impossible to get credit in the future.
If you protect your income with income payment protection, you would still receive up to a certain amount of your lost income each month. This means that you would be able to continue living your current lifestyle and paying essential outgoings. It also allows you to concentrate on getting better or allows you time to find another job while having financial security.
The Basics Of Loan Payment Protection
By : Simon Burgess
Not understanding loan payment protection is the number one fault associated with mis-selling. Providing cover is suitable then taking out a policy to cover your loan repayments can save you from getting into debt and give you peace of mind and the security of an income each month. This income is used to cover your loan or credit card repayments and is tax free.
Loan insurance premiums can vary a lot and the cheapest way to take out a policy is to go with a standalone specialist provider. By choosing to buy cover after taking out the loan you will not feel as though you are getting pushed into the cover and you will be able to take your time going over the terms and conditions. An independent provider will always make this information available.
A policy could start to pay out if the policy holder was out of work due to an accident or illness, or through unemployment such as redundancy. The policy holder waits a period of time before receiving a payout, which usually comes 30 to 90 days after being out of work continually. The policy pays out a tax-free income for up to 12 months, or for up to 24 months with some providers, which is usually enough time to recover and get back to work.
You do have to make sure that a policy would be suitable for your circumstances before you buy. This is due to there being terms and conditions that can stop you from claiming. The exclusions most regularly found include being retired or self-employed, suffering an illness or only working on a part-time basis. But these exclusions are not set in stone; for example, providing the illness has not occurred within the last two years then cover might be suitable.
Beware of borrowing online and if you do pay attention to whether loan protection cover is already included. Online lenders have in the past included loan protection as standard unless a box is un-ticked. While the majority of lenders have now put an end to this to avoid confusion, it is worthwhile double checking. The same goes when taking out a loan with the high street lenders, because they have also been known to add in the cover and then add interest onto the total amount. This, of course, can almost double the cost of what was a cheap loan and is the most expensive way of purchasing peace of mind.
When buying a protection policy for your loan make sure you know whether you will pay a single premium or regular one. If you pay a single premium then lenders will charge around three years' premiums upfront, which you are expected to pay in one lump sum. You also need to pay attention to any clauses relating to early repayment of the loan. Always check to make sure what you would be able to claim back if you should take the loan out then find out you can afford to repay it early.
While loan payment protection can work and give you a much needed income it does only pay out for a maximum amount of time. While in the majority of cases the individual will return to work within this period, occasionally they remain unable to work for a longer period. Therefore, you must consider how you would be able to maintain the repayments if you should remain off work once the cover stopped providing an income.
|