PPI: What Is It? And Why Would You Need It?

Find out if PPI is beneficial for you and your family.

11:09 12 April 2013

What do you do if you become ill and can’t work?

 

No one likes to consider those possibilities and for good reason, but unfortunately there are times when the unexpected throws a wrench into our normal everyday lives. Thankfully with a PPI plan, there is a little bit of help dealing with those snags. PPI is Payment Protection Insurance. Here are a few of the ways that this can work in your favour if ever the need arises:

 

• Death
• Illness
• Disability
• Job loss
• Extenuating circumstances

 

PPI may be able to help you make your loan payments in the event of any of the above circumstances. Essentially anything out of your control that prevented you from making payments could be considered a legitimate need. Many people feel they don’t want or need this type of protection and refuse to spend the money on such a product.

 

If you can be much disciplined and have enough monthly income to save quantities for unexpected issues, then you may not need this. If your income doesn’t allow you to set aside the amount of savings you feel you need, or if you’d feel better knowing that you are covered if a problem arises, then this is the coverage for you.

 

This type of cover can sometimes be confused with income protection, so here is what it does not cover:

 

• Your actual income that has been lost
• No partial income payments
• Long periods of need (usually more than 12 months)
• Household expenses such as utilities or groceries

 

PPI deals strictly with the actual loan payments you owe, and in many cases plans have to be purchased with each loan. Many credit card companies charge a small monthly fee for the service, and you may also opt for similar benefits on larger purchases such as homes and vehicles.