Payment protection could ensure that you did not fall behind on your repayments if you became involuntarily unemployed or incapacitated. If one of these events occurred you would have an income that you could fall back onto which you would use towards being able to keep up with your chosen repayments. You might choose to take out loan protection, income or mortgage cover depending on what your biggest outlay is each month.
You first have to choose which payment protection policy would suit your needs the most and then choose the sum you want to protect which would be your income if you had to make a claim on the policy. This sum of money is then paid back after you had been a victim to redundancy or was unable to work for a certain amount of time. Some providers will pay out on your policy once you have been redundant or incapacitated for a period of just 30 days. Other providers could ask that you defer from putting in your claim until day 90 so checking terms is essential. The same would apply as to how long the provider would continue to pay out on your policy. Some providers could allow you an income over 12 months and others might allow you to make your claim if needed for up to 24 months. Again you would need to check in the terms at the time of taking out your cover.
If taking out your policy over 24 months then you will have to pay out more in premiums than a policy paying out over 12 months. While 12 months of protection could be more than you would need you do have to take into account that whether you take out a policy paying over 12 or 24 months if you had to claim for up to the term the benefits would cease once that term had been reached. Also bear in mind that you could have fallen behind on your mortgage, loan or rent by 3 months if you had to wait for up to 90 days to claim on the policy.
Any form of payment protection can be tailored to suit your needs. You might choose to cover unemployment and incapacity in one policy and claim should you suffer from either. However you could just take out a policy that would give you an income if you became redundant or you could just take a policy for incapacity alone. Check the terms offered by the provider to find out if they allow you to make a claim for carer cover. Some generous providers will allow you to claim on your insurance if a close family member becomes ill and you have to give up your job to stay at home and take care of them.
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