Many lenders recognise payment protection insurance as a comforting concept. It requires them to pay for a monthly premium that usually lasts for a year. Every time they are unable to work due to involuntary employment, accidents, or illnesses, they will get an income that they can use to pay off their debts. Some policies may also provide full repayment in case of unexpected death.
Do you need protection?
This policy may sound enticing, but you have to decide whether you actually need it or not before buying it. Here are some of the important questions you need to ask yourself before finalizing your purchase.
First, ask yourself if you are already covered by other insurance policies. If you already have a life insurance policy, you have to check its terms and conditions before jumping to a payment protection plan. Once you have noticed that it will not give you the amount of protection you need, you can already purchase payment protection to supplement your life insurance.
Next, you have to check your savings account before jumping into this offer. If ever you encounter an accident or illness, is your savings enough to pay for your monthly debt repayments? If you answered this question with a definite yes, you have to think twice before purchasing an expensive PPI policy.
Finally, try to look at your circumstances in a realistic manner. Do you think your friends or relatives can help you in times of financial hardship? Does your employer offer benefits for employees who are unable to work due to illnesses or injuries? Always check your resources before resorting to a loan protection plan.
Are you a victim of PPI mis-selling?
Unethical selling practices are usually associated with payment protection insurance. Since some people may buy this policy even if they will not get the chance to make a valid claim in the future, you have to check its limitations and exclusions first. If it seems like you are qualified to get compensation from this protection policy, do not hesitate to purchase it for your own good.
If you already purchased this policy, you have to reflect on how your lenders sold it to you. Were they able to discuss the specific exclusions that may affect your chances of receiving compensation in the future? If your lenders offered you this policy without explaining its limitations and exclusions, you have the right to fight for your PPI claims.
Can you get it from your lender?
Of course, you can always ask your lender if they are offering payment protection insurance. However, this does not mean that you are required to purchase this policy from your lenders alone. You have the right to shop around for insurance policies that manage to offer maximum protection at reasonable prices.
Some lenders may also advertise the costs of loans without disclosing its insurance cost. They usually keep their loans cheap and load the added costs on the insurance policy. Before taking out any financial agreement, you have to dig deeper and find out whether it includes additional insurance costs or not.
However, if you are really aiming for this insurance policy, you can always keep its costs low by looking for standalone PPI policies. You can use them to protect any kind of loan that you have already taken out at a price that is cheaper than what your lenders are offering. Just make sure that you are not double covered by removing the check in the payment protection box of your loan form.
Always remember these tips while you are shopping for the best payment protection insurance. As long as you are keeping your eyes open to the potential risks of purchasing PPI policies, you will never become a victim of lenders who are trying to take advantage of their clients.