Having a credit card would mean that it is possible that you were offered or took out payment protection on the card. There are many people who take out this insurance but even so, there are few people who can benefit from it, and often you are just wasting money by having it. But there are people who can benefit from the insurance and should take it out as well. Below are some tips to help you decide if ever you are unsure about whether or not you should get payment protection insurance.
All about Payment Protection Insurance
An insurance offered on credit cards or loans to cover your repayments should you not be able to make them is called Payment Protection Insurance or PPI. Usually, you are covered for either sickness, unemployment, and injury that would prevent you from working. Your payments can be paid for anything up to 1 year, by which time your balance might well have been fully paid off.
The Costs of PPI
While PPI might sound like a good idea, on the other hand it does require a lot of money. Usually, when your balance is low then you don't feel the cost since it is charged as a percentage of your balance. However, the amount can be large if the debt is high but you might not notice it amongst all the other transactions on the card.
The levels of cover
In general, while PPI can help some people, the level of cover offered is very poor. There are actually a lot of strict criteria that need to be met for you to make a claim and at the same time, plenty of people find that they are ineligible. If you are self-employed then stay away from PPI, because it is very unlikely that you will be able to claim the unemployment benefits.
Is PPI the Best Choice?
While PPI has some problems, the fact remains that there are people that should consider taking it out. The people who are prone to illness, or who regularly engage in sports or other high-risk activities are examples of this. PPI will cover you if you are ill or injured and unable to work, so if you think this is a possibility then consider getting PPI.
Alternatives
You should look at the alternatives available if you are considering getting PPI and most of these are actually cheaper than the insurance offered by your card issuer. Taking out a stand-alone PPI policy from an independent company is one of the options. These policies are usually a fixed amount and are not dependent on your balance, and are a lot cheaper than regular PPI policies. Also, you should look into whether you are covered for the terms of PPI under other insurance that you currently have, such as health, liability or company insurance. You should be able to find a PPI package that is cost-effective and gives you the cover that you require as long as you look at all the alternatives.
All about Payment Protection Insurance
An insurance offered on credit cards or loans to cover your repayments should you not be able to make them is called Payment Protection Insurance or PPI. Usually, you are covered for either sickness, unemployment, and injury that would prevent you from working. Your payments can be paid for anything up to 1 year, by which time your balance might well have been fully paid off.
The Costs of PPI
While PPI might sound like a good idea, on the other hand it does require a lot of money. Usually, when your balance is low then you don't feel the cost since it is charged as a percentage of your balance. However, the amount can be large if the debt is high but you might not notice it amongst all the other transactions on the card.
The levels of cover
In general, while PPI can help some people, the level of cover offered is very poor. There are actually a lot of strict criteria that need to be met for you to make a claim and at the same time, plenty of people find that they are ineligible. If you are self-employed then stay away from PPI, because it is very unlikely that you will be able to claim the unemployment benefits.
Is PPI the Best Choice?
While PPI has some problems, the fact remains that there are people that should consider taking it out. The people who are prone to illness, or who regularly engage in sports or other high-risk activities are examples of this. PPI will cover you if you are ill or injured and unable to work, so if you think this is a possibility then consider getting PPI.
Alternatives
You should look at the alternatives available if you are considering getting PPI and most of these are actually cheaper than the insurance offered by your card issuer. Taking out a stand-alone PPI policy from an independent company is one of the options. These policies are usually a fixed amount and are not dependent on your balance, and are a lot cheaper than regular PPI policies. Also, you should look into whether you are covered for the terms of PPI under other insurance that you currently have, such as health, liability or company insurance. You should be able to find a PPI package that is cost-effective and gives you the cover that you require as long as you look at all the alternatives.
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