Payment Protection

Payment protection insurance is one of the best ways to guarantee that your bills will still get paid if you find yourself in an unstable financial situation due to unemployment. Unexpected unemployment can bring a huge burden to any household; worrying about finding money for the essentials like paying the mortgage and the council tax can cause much unwanted stress. By choosing to purchase a payment protection insurance plan you are securing the stability of your household for the amount of time specified in the policy.

There could be several reasons for you to lose your job. Perhaps an accident that has left you with a disability or a long term sickness has prevented you from being able to continue going to work. Being made redundant is also something that would affect your income and is completely out of your control. Payment protection insurance will guarantee that in the event of any of these things, your home and your lifestyle aren’t too drastically affected. With payment protection insurance if you do suddenly find yourself unable to work then you would begin to receive a monthly payment that would first come into effect after the period stated in your contract as your excess period.

Payment protection insurance will usually cover you for about 50% of your income. However it is also worth noting that it is not eligible to be taxed and is therefore closer to your previous income then it may seem. Cover of this kind can vary in length but should usually protect your finances for approximately 12 months. This is something that you should always check before taking out a policy so you know the exact time frame that your payment protection insurance will be assisting you for.

Different insurance companies will obviously have their own specific eligibility criteria, although there are some general guidelines that tend to apply. It is usually required that you are between 18 and 63 years of age and that you are a UK resident with employment in the same country. This must be paid employment with a company that you work for for over 16 hours a week. Additionally, this employment must be with a permanent contract that you have had for at least 6 months.

With payment protection insurance it is beneficial to be aware of the fact that any medical problems that you are aware of may pose a problem to your policy. If you have an illness when you take out the plan and this same illness is the reason for any future inability to attend work then you normally won’t be able to claim cover for this.

Payment protection insurance can also be attained by those who are self employed, however the clauses in the contract may be slightly different. Under the right circumstances, payment protection insurance can be a vital tool to maintain your household through a period of difficulty. It is strongly advised that you consult with a professional to ensure you are getting the payment protection insurance that is tailored to your needs.

Taking out a loan or a mortgage can be a daunting thing. Although your finances may be in a position to allow you to meet your repayments now, it is an unfortunate fact of life that things happen which we could not have foreseen. Payment Protection Insurance is one way of gaining peace of mind, meaning you do not have to constantly worry about the effect unforeseen circumstances could have on your finances.

Payment Protection Insurance is a type of insurance that covers you in the event that something happens which renders you incapable of keeping up with your current mortgage repayments. Some types of illness and redundancy are not usually covered, such as stress and back pain. You will also not be covered for a pre-diagnosed medical condition that could affect your ability to work. Apart from some exclusions, Payment Protection Insurance can be invaluable.

If you lost your job through no fault of your own, you would suddenly find yourself in a tough situation financially. You would still be expected to make you mortgage repayments, but with your income either significantly reduced or halted completely, you could be in serious trouble. With Payment Protection Insurance, you would be covered for a set period of time – usually a year – so that if you are looking for work for a long time, your mortgage payments would be taken care of by your insurance company.

Similarly, if unexpected and serious illness meant that you were unable to continue working your Payment Protection Insurance would cover your mortgage payments for you for the duration of your sickness. It is important to pay attention to the period of time that your policy agrees to cover your repayments for, however, as these vary from policy to policy. If you are unable to work for longer than the specified period you will become responsible for paying your mortgage again yourself.

In order to be eligible for a Payment Protection Insurance policy, you must be in permanent employment. Retired people, students and self-employed people are not covered by this type of insurance. It is worth remembering that even if you should become unable to work, Payment Protection Insurance does not cover the cost of things such as rent and utilities. However, compared to having to pay for those things on top of paying your monthly repayments, Payment Protection Insurance has a clear advantage.

You can never be entirely certain what the future will hold for you. In today’s volatile economy, no one’s job is entirely safe. If you are made redundant there is a chance you will be out of work for a long time. Similarly, you cannot be sure that your health will always be perfect. With Payment Protection Insurance, you do not have to worry about what the future might hold. Your payments will be covered for you, leaving you free to focus on finding a new job, or on getting better.