Payment Protection Insurance – When Do You Need It?

payment protection insurance

Payment protection insurance (PPI) covers a loan if you die, get sick or disabled, lose your job, etc.  PPI is sold as an additional product.  Based on this MoneyWeek post, you can protect yourself best by not borrowing as much.  But if you are looking into PPI, think about the points below before you ever need to make a claim or reclaim your ppi fees.

Would you Be Eligible?

For many policies, you won’t be able to make a claim if you have a part-time instead of a full-time job, if you are self-employed, if you find you can’t work as a result of a health condition that was pre-existing, or if you are working on a short-term contract.  Plus, some policies will only insure you if you are incapable of working at any job rather than just at your current job.  Would any of those keep you from qualifying?  Make sure you read all of the details of your own policy before signing on the dotted line.

Do You Need PPI?

Some employers offer a few disability or sick benefits that are generally overlooked that may help you cover your debt without needing another insurance policy.  Similarly, some other insurance policies may already cover the same things that your PPI might cover.  Also, if you already have a healthy emergency fund, you might not need anything else.  Make sure any new policy will actually be helpful.

Finding the Best PPI for You

Once you know that you will qualify for sure and that you want the extra coverage, it is time to find the right PPI policy for you.  Since insurance can be pricey, you will want to compare multiple quotes.  Then remember to read all of the paperwork for every single policy that you are interested in before you pick the policy that covers what you need at a price that fits your budget. Good luck!


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