Payment protection can be used as your lifeline if you lose your own income. You could for example lose your income to redundancy or you could lose it if you become incapacitated. In any of these instances you would be able to fall back onto the policy you had chosen to cover the repayments or outgoings you wanted to protect. You might take out loan, mortgage or income payment insurance depending on what you have to pay out each month.

You could take out income protection if you wanted a replacement income that could be used for any essential outgoings or repayments that you needed to make each month. You might choose to cover your mortgage repayments with mortgage insurance if this is the biggest outlay you have to make each month. Alternatively you might choose to take out loan payment if you have secured or unsecured loan repayments to maintain each month. You could take any policy by choosing how much of your mortgage or loan repayments or your income you want to cover. This amount would need to be agreed with your provider as it is then the income that you get back if a claim should have to be made on your policy. You would need to wait for so many days before making your claim and this is generally between 30 and the 90th day with some providers dating back your income to the first day of your unemployment or incapacity. You could then rely on benefits for a period of time which would usually be between the 12th and 24th months after which time the policy would cease.

You might choose to take out your payment protection insurance to protect against unemployment and incapacity in one policy. You could then make a claim on your protection if you were to become a victim to either of these events. You could also choose which event you wanted to protect. You might take out a policy that would pay out if you were to become redundant or you could just choose to take a policy that would provide you with an income in the event you became incapacitated.

Any form of payment protection would come with some exclusions and these would need to be checked against your lifestyle to ensure that you would be eligible to make a claim on your policy. For instance living in the UK, Channel Isle or the Isle of Man is essential. You would also have to be in full time work and have been working full time for a period of no less than 6 months in order to be eligible to claim on your policy. Some providers add in more than others so checking how many exclusions are in your cover is essential at the time of taking it out.

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