Payment protection insurance refers to the insurance cover which might help you to repay your loans. In case you have taken a loan from the bank and suddenly you are struck by an accident or lose your job you can make use of PPI insurance cover for making repayments. This study is going to throw light on this insurance scheme so as increase your knowledge on it.
Working of Payment Protection Insurance
If you have taken loan earlier and now finding it difficult to repay it then PPI companies can help you out with their insurance policy. This policy can well be utilised by the borrowers for paying their debt either on credit cards or any other personal loans.
In order to utilise the benefits of this policy, you need to be employed for about 16 hours a week. Otherwise, you will not be entitled to their insurance coverage. However, this policy cannot be used for paying long-term debts rather they are only meant for a short period of time. This insurance cover is generally provided by the credit card providers or financial institutions.
Policies Covered Under PPI
- There are certain policies covered under this insurance scheme and this has been dealt with in detail for your reference.
- Unlike other insurance policies whereby the insurer has to fulfil certain health or personality criterion, this insurance scheme is completely devoid of it.
- The insurer has the complete liberty of fixing the amount that you wants to cover. The limit of the policy coverage is specified as 1 year.
- The PPI companies that provide you with insurance offers you amount solely based on your age.
- The lower the age the more chances of getting good benefits. The reason being these companies are of the viewpoint that when a person belongs from younger groups then he/she has lesser claims.
- There are certain insurance policies that will give you death benefit.
- The claims can be submitted by policyholder within 30 or 90 days after he/she has been unemployed.
Know Its Merits
One of the biggest benefits of payment protection insurance is that it can help you in keeping a check over your credit scores. This insurance cover might help those who are unable to make repayment and hence cleared out their credit reports. The most probable reasons for claiming payment protection insurance is to get your financial asset secure. One can get a large number of options while opting for PPC.
There are different types of policies specified for unemployed, accident sickness or other such cases. In fact, one can obtain this loan for car loans too. The best part of it is that once your insurance term is covered you can cancel it and save yourself from paying further premiums. The insurer is able to increase their premiums in certain circumstances.
This, it can be said that you need to check whether you are insured by PPI or not as it can serve as a helping hand in your difficult times especially at the time of financial crisis.