Payment insurance could be your lifeline against debt and arrears if you lost your income after falling sick, suffering an accident or if you were to become unemployed. You can take out payment protection in the form of loan or mortgage cover for the repayments and by way of income payment protection to cover your essential outgoings.
You would insure up to a pre-agreed sum of your mortgage or loan repayments or income when taking out a payment insurance plan and would be able to claim this sum of money back as a tax-free payment if you were made redundant or lost your income due to accident or sickness. The money you would receive back would go a long way towards you being able to keeping your finances in order while you sought another job or recovered.
If you had taken out mortgage payment protection insurance (MPPI) then this sum would go towards ensuring that you did not fall into arrears with your mortgage payments. You would only have to miss one payment and the lender would send out a letter. Miss another and you would be expected to make an agreement to catch up on what you owe and continue paying your mortgage. If you cannot make an agreement then you would be taken to Court and the lender would seek possession of your home. With a policy behind you this threat would not be there.
You would be able to continue servicing your loan repayments with loan payment protection. You would not be at risk of falling into debt with the payments and the lender taking you Court, you would also not risk affecting your credit rating.
Your payments in general could be maintained with the help of income payment protection. You would not have to make changes to your lifestyle or have to juggle bills around. You could pay any bills that came into the home each month regardless of what they might be.
All forms of payment insurance can be found cheaply when you choose to buy them independently. If you get a quote from payment protection specialist British Insurance you would save as much as 80% on the cost of insuring your loan payments and 40% on protecting those of the mortgage. Cover with British Insurance would begin to payout once you had been unemployed or incapacitated for a period of 30 days and it would continue to payout for up to 12 months if needed. While this might be enough time to make a recovery of find work again you could be offered protection that might payout for up to 24 months. You would need to check the cover’s terms to find out when it would payout from as sometimes this could be up to day 90 with some providers.
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