Credit cards can really be helpful especially in times of financial emergencies. You get to shop all you want and pay for all the things that you need instantly. But what hurts after is the huge amount of credit that you have to pay until you reach the point when you already loathe seeing your credit card bills in your mail. This will never be a problem if you still have the means of paying for your credit loans but once you experience loss of your regular income, then your credit card bills will certainly become a burden.
Cases as such sometimes lead to lawsuits as credit card companies will naturally want you to repay what you owe them and this can really be impossible if you are unemployed. But there is a way to help you get through all of these and that is by securing payment protection insurance. This is a kind of insurance that allows you to fulfill your credit obligations with ease and convenience.
What is payment protection insurance?
In most cases, payment protection insurance or PPI is offered to clients at their initial application for credit cards, loans, or mortgages by the lending companies themselves. This is so as they want to make sure that the money they will be lending will be returned to them in full and with interest and so, they encourage their clients to avail of this kind of insurance policy.
What PPI basically entails is coverage of your loan payments in case of loss of employment. This means that when policy holders lose their source of regular income due to reasons like sudden illness, injury caused by accident, or any other situations stated in the policy''s provisions, the insurance company may take over paying for the loans for as long as stated in the contract. This is indeed beneficial in a sense that loaners will have that peace of mind knowing that whatever happens, they can continually pay for their loans, saving them from a lot of trouble and at the same time, lifting a huge amount of burden off their backs.
How to secure PPI?
Getting your own payment protection insurance is very easy as it is readily offered by credit companies. At the same time, there are also a lot of independent insurance companies that can provide you with this kind of policy. However, what you need to remember is that PPI is just an optional type of insurance. The lending company must never coerce or trick you in purchasing the policy as not all people are entitled for PPI claims. Like all types of insurance, PPI is created with terms and conditions that limit the provisions which is why it is important that you analyze the policy carefully. And so, to avoid being mis-sold with the insurance, here are a few tips you must remember:
- Before even considering getting payment protection insurance, the first thing that you need to do is to evaluate if you really need it. Calculate how much your existing debts are and how long it takes to pay for them fully. At the same time, consider all your other expenses like your everyday needs, education of your children, etc. This way, you can be sure if the amount of coverage is sufficient enough to give you the financial assistance that you need.
- Read all the provisions carefully as PPI policies are said to be quite limiting. Make sure that you understand what the policy entails so that you can gauge whether you will truly be able to benefit from it. Look for loopholes that may prevent you from making claims and if there are any, then it will be best to look for other policies instead.
- Make sure that upon applying for PPI, you still have your job and are not in any risk of losing it any moment. This is one of the most important things that you need to remember to make sure that you are eligible for making claims.