Financial Resource

Payment protection can be done in three ways:

-Mortgage cover
-Income cover
-Redundancy cover

If you are out of job, redundant and are unable to resume to work due to your illness or accident all the three will help you pay back your loans. Be it an income cover, redundancy cover or a mortgage cover all of these will save your collateral. A redundancy cover is applicable only when you become redundant involuntarily such as lay offs, accident or illness. Income cover will pay you a portion of your income when you are away from work. This can be used to pay off your mortgage monthly payments, credit card bills, electric bills etc.

It helps to avoid any late payments or missed mortgage payments. You can also save your valuable collateral such as your house which is pledged against the loan. You may opt for an insurance premium which is on a higher side so that you will be covered for a compensation up to your retirement age. Right in the beginning, you must specify what is it that you need? You want a compensation till your retirement age or till you find another job? If you have opted for a cover till you are 40 years of age, then you will not be covered in case you are bed ridden for life time. So, think over this before you apply for one.

All the three covers mentioned above will help you make your loan payments which are due. It is therefore indispensable to have them. In case you are in a dicey situation and face a lot of risks of losing your asset due to non payment of mortgages, it is better to be on a safer side. You will be well protected and relieved from the stress of not being able to meet your living expenses. It is a breather in deed!

What doesn’t payment protection cover?

If you are on your paid sick leave and are out of work, you will not be paid by the insurance company. In case you have exhausted your sick leave and are on loss of pay you will be compensated. This will not allow you any dual income source, it should be only in case of no income on hand, not when the employer is paying you. This payment protection cover will also cover your mortgage as well as your credit card bills if you are unable to go to work. Some times, there is a full payment of your monthly mortgage charges paid out to you.

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