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Check Out Payment Protection Insurance


Unexpected events such as job loss, illness, or injury can make it difficult to keep up with loan repayments. That’s why many people choose to check out payment protection insurance (PPI) as a way to safeguard their finances during uncertain times.

In this article, we explain what payment protection insurance is, how it works, and whether it’s worth considering.

What Is Payment Protection Insurance?

Payment Protection Insurance (PPI) is designed to help cover loan or credit repayments if you’re unable to work due to:

  • Accident or injury

  • Sickness or illness

  • Unemployment (in some policies)

It is commonly linked to:

  • Personal loans

  • Credit cards

  • Mortgages

  • Auto loans

Why You Should Check Out Payment Protection Insurance

Before choosing any financial product, it’s important to understand its value. Checking out payment protection insurance can help you decide if it fits your financial situation.

Key benefits include:

  • Temporary financial relief during hardship

  • Protection for your credit score

  • Peace of mind when income is disrupted

How Payment Protection Insurance Works

If a covered event occurs:

  1. You file a claim with your insurer

  2. After approval, the insurer pays some or all of your loan repayments

  3. Payments continue for a limited period based on your policy

Coverage terms and payout limits vary by provider.

Pros and Cons of Payment Protection Insurance

Advantages

  • Helps cover essential loan payments

  • Reduces financial stress

  • Easy to add to existing loans

Disadvantages

  • Additional monthly cost

  • Coverage limits and exclusions

  • May not be necessary if you have strong savings

Carefully reviewing policy details is essential.

Who Should Consider Payment Protection Insurance?

Payment protection insurance may be useful if you:

  • Rely heavily on a single income

  • Have limited emergency savings

  • Work in a high-risk or unstable job

  • Want extra security for loan repayments

If you already have strong savings or employer benefits, PPI may be less necessary.

How to Choose the Right Payment Protection Insurance

Before buying, always:

  • Compare multiple providers

  • Check exclusions and waiting periods

  • Understand claim limits

  • Avoid bundled policies without review

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Alternatives to Payment Protection Insurance

Depending on your situation, alternatives may include:

  • Emergency savings funds

  • Income protection insurance

  • Disability insurance

  • Employer-provided sick pay benefits

Sometimes, these options offer broader and longer-term protection.

Final Thoughts: Should You Check Out Payment Protection Insurance?

Payment protection insurance can be a helpful financial tool—but only when it matches your needs. By taking time to check out payment protection insurance, comparing options, and understanding exclusions, you can make a smarter and more confident decision.

Key takeaways:

  • PPI helps cover loan repayments during hardship

  • Always review costs and exclusions

  • Compare before purchasing

  • Consider alternatives if available

Financial protection starts with informed choices.


Summary:

Payment protection insurance is an optional insurance cover that you can pay for.  The cost will be added to your monthly credit card bill and will typically be assessed on the basis of your outstanding credit card balance. So, for example, the cost of the insurance might be five pence on every pound you owe on your credit card bill, so if you owed one hundred pounds, five pounds would be added to the bill as the cost of the payment protection insurance.



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Article Body:

If you check your credit card bill carefully, you will notice that there is sometimes an optional extra charge there. You may have selected it and in that case it will cost you a set amount, or it may be that you have not selected it and in that case it will be zero. This payment protection insurance or PPI. Payment protection insurance has grown rapidly in the last couple of years and is now offered by virtually all credit card providers, on all of their products. It has had both praise and criticism, with one of the strongest criticisms being that it offers the customer no protection at all, and only protects the lender. 


Payment protection insurance is an optional insurance cover that you can pay for.  The cost will be added to your monthly credit card bill and will typically be assessed on the basis of your outstanding credit card balance. So, for example, the cost of the insurance might be five pence on every pound you owe on your credit card bill, so if you owed one hundred pounds, five pounds would be added to the bill as the cost of the payment protection insurance. 


One of the fiercest criticisms of payment protection insurance is that it will not offer any protection. It is designed to guard you against such possibilities as losing your job or becoming unable to work. If you become unable to meet your repayments on a credit card, typically what happens is you will become subject to harsh penalty charges, your credit rating will be severely damaged, and eventually the debt will be referred to a collection agency. 


What the payment protection insurance is supposed to do is step in in such situations and continue making the repayments on your behalf. However, there are very strict conditions attached to payment protection insurance. It will only meet your repayments if you have lost your job through no fault of your own. So for, example, if you are made redundant, or become ill, the insurance might step in, but if you simply quite your job, it will not. Also, there is the issue that many forms of illness will not be covered, or if they last too long, the repayments will only be kept up on your behalf for a limited time. 


Therefore, you should consider carefully before committing to payment protection insurance. You can cancel it at any time, but it is one more expense that you should think about before incurring.


Many credit card companies make you choose their own payment protection insurance, however, did you know you did not have to?


Just recently the Office of Fair Trade announced that credit card companies were to allow consumers to choose their own payment protection insurance from a third party. This move is a welcome relief to consumers as now they can take their pick from a variety of payment protection insurers at a lower cost. It many cases consumers have found their payments have been halved and that they have more insurance cover than before.