Just how useful is payment insurance?
- 25TH JULY 2007
Payment insurance serves a very real function in society today and is one of the most important policies anyone with debts such as a loan or credit card could actually have. Unfortunately, it is often forgotten today because it has only been publicised for negative reasons, including the ongoing Financial Services Authority investigation into the value of payment insurance in conjunction with improper high street bank conduct and mis-selling for profit.
However, it can provide peace of mind for any individual in debt should he or she ever encounter redundancy or long term illness and be unable to work as a result.
Payment insurance is often perceived as a waste of money, but if the worst does happen and an individual was unable to work for a period of time, it would cover debt repayments for a set period of time, which is usually twelve months on the majority of policies. It can be hard enough to make ends meet at the moment anyway, because the cost of living is so high and the incomes that individual consumers earn are nowhere near as high as they need to be to cover everyday living. Payment insurance can therefore remove the worry of debts so consumers can concentrate on living.
Although lenders and high street banks do not insist on consumers not getting into debt by having payment insurance, it is doubtful that they would allow any individual to skip payments for up to twelve months. This could lead to CCJs against an individual’s name or, in the worst cases, the loss of their home and bankruptcy. Unfortunately, this is a fact of the modern financial industry and consumers should worry about the worst happening as a result. Payment insurance can remove that worry.
Standalone providers like the ethical British Insurance can offer peace of mind at an affordable monthly rate and help to ease the burden of financial struggle if an individual was unable to worth. As a result, payment insurance is extremely useful and should be sought by borrowers everywhere.
