Payment Protection Insurance

Payment Protection Insurance

In the UK, the issue of mis-selling Payment Protection Insurance has become big news in the financial sphere. Some people who bought the policy end up not getting the benefits that they need or are oblivious as to what it entails. PPI usually has very strict limitations when payouts will be acknowledged so for anybody planning on getting PPI, it pays to know what you are getting into before you actually buy.

Definition of Payment Protection Insurance

In the simplest sense, Payment Protection Insurance is a policy designed to help consumers with their debt repayment in the event that the person cannot generate income due to illness, handicap due to accident or if you were made redundant. The payment protection can be applied to numerous types of debts including your mortgage. Should you become incapable of working and generating income, theoretically, the insurance company will send a sum of money regularly to cover your mortgage.

In fact, the Payment Protection Insurance can also extend its coverage to other loan types, credit card bills, as well as shopping payments. The idea is that the Payment Protection Insurance will pay a portion or percentage of the monthly repayments over a fixed term. Usually, you can buy a plan with a 12 t0 24 month term. Should the person start generating income once more, the benefits stop accordingly?

Strict PPI Claim requirements

Now, when it comes to Payment Protection Insurance, you have to know that there are strict requirements and conditions to understand. Usually, the insurance company will not cover you for the first 90 days after you stopped working so when you buy this product, you should be prepared with an emergency fund to cover your bills for at least 3 months. There is also a limitation on the kinds of illnesses that will be acceptable for Payment Protection Insurance claims. If you have preexisting conditions, the policy usually does not cover that cost.  PPI should not be considered as a retirement fund since it does not cover you when you leave work as a retiree.

Considerations for purchase

Consider buying Payment Protection Insurance if you still have numerous loans that you have to pay. These loans still have a few years to be completed and you want security that if you lost your job or gotten sick, you can continue paying these loans. It would be more ideal to use this on large loans such as mortgage. Take time to review the policy and make sure you know the terms of the company. This way, any clause or vague information will be clarified, reducing risks of your claims getting rejected.

To start your PPI claim today simply fill out the short form above or call us for free on 0800 840 7292 and speak to one of our expert advisers.