Payment protection insurance isn’t suitable for everyone, however in certain circumstances you may wish to consider it. Here are the following things you need to consider before taking out payment protection insurance.
- Do you really need this type of insurance? Do you have loans or credit cards that you wont be able to pay should you become sick, disabled, or rendered redundant? If the threat of not being able to pay your loans is significant, then payment protection insurance might be able to help you. Always measure your need for payment protection insurance before signing up for it. If you have no loans, credit cards, or mortgages, then purchasing the insurance product would be a waste of time and money.
- Are you already signed up for a sick-pay scheme? Some companies offer sick pay to employees who cannot go to work due to sickness. If you are being offered sick-pay, then you might not need payment protection insurance. You can use your sick-pay to pay off your loans, credit cards, or mortgages. Before signing up for payment protection insurance, ask your company if they issue sick pay.
- Do you have any other alternative sources for paying off your debts? Some people already have income protection insurance, life assurance, serious illness cover, or personal accident insurance. If you are one of these people, then signing up for payment protection might be a waste of your money. One of the things criticized about payment protection insurance is that its policies tend to overlap with other insurances. Try to remember the insurance youre signed up for and review their corresponding policies. Some of these policies might be able to settle your debts for you without having the need to sign up for payment protection insurance.
- Have you reviewed the terms and exclusions of payment protection insurance? Payment protection insurance comes with a myriad of terms and exclusions that prevent some people from making a claim. You should know that not all sicknesses are covered by PPI. Some sicknesses, such as pre-existing conditions or chronic illnesses are not covered by the insurance. Those who were fired due to misdemeanor will not be covered as well, while those who are self-employed will not be able to sign up. Those who have been briefed of being redundant at the time of signing up will not be able to seek cover as well. Before signing up for payment protection insurance, it is wise that you know all about it. You might be signing up for an insurance which you do not need.