Loan payment protection insurance is one of three basic types of short-term insurance protection that Brits rely for unemployment. Mortgage protection and income payment protection are the other two broad types of coverage. These coverage products all make up an umbrella of protections known as payment protection insurance (PPI). They all basically offer customers financial assistance for 12 to 24 months, in the events of job loss due to involuntary redundancy, prolonged illness, or accident.
Although benefits of the three broad types of payment protection are very similar, loan payment protection insurance is generally the broadest in terms of coverage benefits, and allowable coverage amount. It covers the same basic unemployment events that the others do, but many plans also have payment protection in the event of death. This is very important to surviving family members. Another nice advantage of the loan protection is that it usually provides coverage up to 75 per cent of one's monthly income. This is slightly more than is allowed through typical mortgage protection products, and it is about 25 per cent more than is normally covered by income payment protection.
The purpose of the loan coverage is to allow people to pay their monthly debt obligations in the event of unemployment caused be a covered event. Customers can opt for coverage of one or multiple events. Full protection comes from coverage of all triggering events available. Many Brits mistakenly rely on State assistance in the event of short-term unemployment. This is a mistake, as the State generally provides little to no assistance, depending on the situation. Loan payment protection, however, can help take care of all monthly debt obligations, but there are maximum amounts with all plans.
Many people do not take advantage of the great benefits of loan payment protection insurance either because of mistaken reliance on other funds, or because of a lack of knowledge of the insurance, its benefits, and providers. Many people feel secured by other insurances obtained through work. Unfortunately, long-term insurance protection known as income protection, does offer the same advantage in price and benefits as the payment protections do for their specific coverage features.
Some consumers have avoided the insurance because of the bad reputation banks and lenders have developed for mis-selling the coverage. They often sell it as an add-on to a mortgage, loan, or credit card, using high pressure of deceptive sales tactics. Some have even been found to sell the insurance to ineligible people.
The goods news is that a rise in consumer awareness has helped more Brits take advantage of lower cost premiums, and more ethical business practices used by insurance brokers or specialists. They usually offer premiums 40 to 80 per cent lower, and they have a stronger customer focus. They are also more knowledgeable of their products, usually. It is extremely important that new home owners, and the two-thirds of uncovered home owners, look at the benefits of buying loan payment protection insurance from a broker in order to protect their financial future.
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