A payment protection policy needs understanding
- 15TH NOVEMBER 2007
A payment protection policy needs to be understood before you buy the cover if you want it to do the job it is supposed to do and to provide you with the right level of cover. While some changes for the better have been seen already with the intervention of the Financial Services Authority (FSA) in 2005, many more need to be made because payment protection is still too confusing to the majority of consumers.
A payment protection policy is often offered at the time of taking out the loan with the high street lender. However, in many cases very little information is given at the time of taking out the cover so you can not always ensure that it is suitable for your needs. Sadly the majority of lenders do not make the consumer aware that they do have the option of shopping around for the cover with an independent provider.
By shopping around for a payment protection policy with a standalone provider such as the ethical British Insurance you can make savings of around 80% on a policy along with making sure that the payment protection cover would be suitable for your needs before you buy it.
There are exclusions in a policy which could mean that it is useless because of your own particular circumstances, so it is important that you check this out. Typical reasons for not being eligible to make a claim include being in part time employment, suffering a pre-existing medical condition at the time of taking out the cover, being retired or self-employed.
Once you have ensured that a payment protection policy would be suitable for your needs then it could begin to payout after the 30th day of being out of work with a policy from British Insurance and continue to give you a tax free payout for up to 12 months. Other providers can ask that you are out of work for anything up to 90 days so always check the small print of the policy you are considering.
