Payment Protection Insurance (PPI) provides regular income to its borrowers for their loan or debt repayment in event of sickness or accident. These insurance covers have received bad rumors. A lot of lenders and financial companies have sold these in unethical manner. It is been argued that companies have sold these insurance covers with financial obligations which are out knowledge of borrowers. If this is to be kept aside, these financial instruments when sold properly provide a great source of mind-relief and protection to its customer.
Payment protection insurance or PPI cover comes in affect in case of any accident or sickness of a person which made him unavailable for work for later course of time. During these times borrower may be unable to pay him/her outstanding financial balances. These insurance covers are sold with all kinds of credit cards, accounts or store cards.
There are few things which need to be kept in mind while dealing with PPI:-.
1. PPI can become priceless to its buyer. It will give them a peace in mind because once insured, even if one is not willing to work due to accidents or sickness his financial needs will be paid by banks in a specific time period. This will help them repaying the loan for a period of time which is decided after a mutual consent between buyer and Seller Company, this means that even if a person is not working any of his loans payment will be missed and overall the credit rating will not go in risk.
2. itís not necessary to have Payment protection insurance, options are available even without this form of insurance. Few lenders try to influence for availing the coverage, but reality is different. To make a non partial decision, benefits of a PPI policy should be looked at.
3. Payment protection insurance not being a mandatory one is still used by many borrowers for the complete peace, which is a primary offering by this kind of insurance. Payment protection insurance ensures a complete peace. The price at which this insurance comes varies a lot and happens to be more expensive with some providers. Itís not required to get the coverage from the lender who is financing; hence enough ground work should be done before selection.
4. PPI is not always beneficial if it is not covering your needs. It can be a complete waste of money sometimes if not suiting your needs. Self employed people may not get an advantage from it in case of redundancy.
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5. Many a time lenders offer loans with the price of PPI included in it and borrowers being unaware of it land up availing it. Extra care should be taken to ensure the quotations for loans or finance while looking for it.