Payment Protection Insurance or PPI. It is an insurance that covers your loan repayments if its borrower dies on a certain accident or disease, becomes permanently disabled or ill, loses job, and other hindrances that blocks the borrower from earning money. Many people are confused between PPI and income protection insurance (IPI). IPI covers income and not a debt. Different banks and credit providers are buying PPI as their add-on to loans or overdraft products.
Loans are extremely helpful. However, paying it back would be a nightmare if you lose a job or you don’t have any income. To address your worries about paying on your loans, you can get PPI. It will cover your loan repayments. It has also different policies that may include life benefit which will pay for your loans and other credits if you die.
There are loans that include PPI. Check it first before you decide to take it out. Ask whether how much it would cost you if PPI is included. Read and understand its terms and conditions if it has PPI. Oftentimes, PPI is already included when you get a loan. You should think of it very hard if you really needed it before you agree to take out the loan. Payment Insurance Protection can be expensive and may not be suitable on your monthly income. You may think of some alternatives to cover your loan repayments if you want. Sometimes, there are exclusions such as being self-employed, you have mental health problems, and you’ve been fired from your previous job. This means that you may find difficulties if you claimed the loan.
Your decision will still be important. You don’t need to take out PPI if you get a loan. However, there are some lenders that don’t agree with their clients if PPI is not included on a loan. If they don’t take out the PPI, you can find other lenders that will provide you a loan that won’t include PPI. Find the right deal for you and don’t get stuck on a certain thing that ill just make you regret. But, if you want to take the loan out with PPI, read its policy to understand more about it.
Your contract for the insurance would be different from your lender. There would be a separate insurance company for it. You will do the claiming of your policy through the insurance company. If you realize that you don’t want PPI included on your loan and its policy will not let you do it, you may accuse your lender for mis-selling you the loan’s policy. You can get a refund if you’re successful.
Getting a loan is really beneficial but you have to think of it very hard because you may encounter some difficulties on paying for it. There are some PPIs that reduced your payments and that would be good news. If you already have an insurance that will pay for your loans if you die or when you don’t have any money to pay for it, then don’t take PPI.