Benefits of Payment Protection Insurance
The acronym for Payment Protection Insurance is, PPI. It is also known by such names as, loan repayment insurance or credit repayment insurance. In this insurance product, an outstanding debt is covered and it is designed specifically for that purpose. This debt refers to any kind of overdraft or any loan that has been sold by any bank or any other type of credit providing companies. The PPI policies can be received by a person, along with different types of financial products such as, various credit cards, loans, etc. This is specially meant for those borrowers, who, due to certain unforeseen incidents like illness, unemployment, accidents or death, have lost the power to earn a salary which he used to do before, and as a consequence, is unable to repay the debt.
Therefore if a person loses his regular income due to causes like redundancy, illness or accident, Payment protection Insurance ensures that the person, who purchases it, is able to pay the lender whatever amount he owes him monthly. This is therefore specially designed to protect those borrowers who cannot make repayment of a loan amount. Due to the degrading economic conditions, a huge number of people are forced to take loans. They, however, do not give it a thought whether they shall be able to repay the loan amount, while taking it. This therefore has become a major cause for the growing number of credit default cases these days. This is where the Payment protection insurance comes to the rescue.
When getting into the scheme of payment protection insurance, the borrowers should keep it in mind, that, they are required to pay a specific amount of money as premium for the scheme. This amount needs to be paid monthly, along with the installments that are paid for the amount of borrowed money. Payment protection insurance is targeted at those people who are unable to pay off loans and such other due, and thus protects them from an uncertain life, because of his being unable to keep up to his monetary promises. Even for the financial institutions, banks and other lenders, this is a beneficial policy as it lets them have their delayed repayment in time with the help of this. This facility is very easy to avail and it comes together with most of the financial loans that are taken by a person. Although the payment protection insurance is very useful, yet, some of its policies are mis-sold beside the credit cards, loans and mortgages. In these cases, you can always reclaim your PPI by numerous processes.
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