Payment Protection Insurance
Article published on 24th July 2008
Sometimes also known as Accident, Sickness and Unemployment (ASU) insurance or Accident, Sickness & Redundancy Insurance (ASR), Payment Protection Insurance (PPI) is an insurance policy usually sold alongside mortgages, credit cards, personal loans, store cards and other sorts of credit agreements. They are designed to help policy holders in the event of them having an accident, contracting a sickness or becoming redundant. Similar to Critical Illness Insurance, PPI policies typically pay a percentage of your usual monthly mortgage premium for a specific period to cover the monthly repayments on your debt. Benefits under a PPI policy usually last for a year.
However, Accident, Sickness and Redundancy cover does not usually allow for dismissal from work for misconduct or for voluntary redundancy, or, if you are injured, the injuries cannot be self-inflicted.
These sorts of 'Income Protection' or 'Payment Protection' policies are often sold with mortgages, credit cards and some larger purchases. Of course, as is the case with all insurance policies it is very important that you read the small print in detail. If you already have a mortgage check your mortgage plan carefully before looking to buy some Accident, Sickness and Redundancy insurance, just in case you are already paying for similar cover. This is not the cheapest form of insurance so take no risks and take the time to look at and for alternative policies.
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