Do you know what PPI is?

PPI can be helpful to some people, but for others may be an unnecessary drain on funds.

07:52 09 September 2013

Insurance is a touchy subject for some people. Most insurance is helpful to people because it simply offers protection in the event an individual suffers from a negative setback. Insurance covers many things, and it’s usually wise to protect your most important investments such as vehicles and homes. Anyone who has been out of work due to medical related issues would probably tell you that Payment Protection Insurance is helpful, but not everyone feels the same way. Here are a few ways to know if Payment Protection Insurance is right for you:

• Eligibility—makes sure you understand and meet the eligibility requirements. If you are unemployed, self-employed, or a contract worker at the time you think about applying for Payment Protection Insurance you would never be able to receive the benefit. If you fall into any of those categories it is a safe bet that you would be wasting money to purchase the protection.

 

• Big-ticket items—if you don’t have mortgage payments to make, a vehicle payment, or significant credit card debt, then you do not need Payment Protection Insurance (PPI). PPI won’t actually replace your income, it only makes partial or full payments directly to loans that you have. If you don’t have any loans and don’t intend to acquire any, you would be wasting your funds.

 

• Ideal protection—in order to reap the benefits of paying into Payment Protection Insurance you would need to be employed according to the acceptable guidelines. This protection is meant to prevent your credit rating from suffering, and to take over some key loan payments so you don’t lose a vehicle or home if you have an issue that reduces or depletes your income, like a layoff.

Remember that Payment Protection Insurance is voluntary, so if you believe you don’t need it or shouldn’t have it, cancel it and fill out forms offered by the government for refunds.