Three Types of Payment Protection Insurance
The three basic types of PPI or payment protection insurance are:
- Income payment protection insurance
- Mortgage protection insurance
- Loan payment protection insurance
Although the type of loan they protect differs, the purpose of the protection is the same. PPI policies pay your debts when you are not able due to illness, accident or loss of employment. If you are not able to earn an income, PPI can cover your debt payments for you, preserving your financial stability. Each type of insurance covers a particular category of debt.
Income payment insurance acts as a supplement to your monthly income in the case of a job loss. Although it likely will not equal the policy holder’s previous monthly salary, the funds will allow the policy holder to cover expenses. Once PPI claims are filed against the policy, funds are made available until a new job is found.
Mortgage protection insurance is largely considered to be the most important of the protection insurances. Mortgage PPI will cover your monthly mortgage payment, giving you and your family peace of mind and security in the midst of financial difficulties.
The purpose of loan payment protection insurance is to provide a policy holder with assistance in covering debts he may have with credit cards.
