How to secure you debts with payment protection

If you want to make sure that no matter what happens, your debts will be paid on term, you should consider PPI

04:01 16 September 2013

Payment Protection Insurance (PPI) is the best way to secure your debts. Just like any other insurance, it can be contracted from a private financial company and it covers your monthly debt payments in case you fall sick or become unemployed. You should look for a PPI when you have a major loan, such as mortgage or car loans that are fixed for longer periods of time. When the PPI becomes effective, it can either pay the full monthly debt or just a part of it, to help you through the transition period. Here are some of the major advantages and disadvantages of the PPI:

Advantages:

• PPI greatly reduces the risk of being unable to repay your debts;

 

• The PPI is of great help with repaying your debts if you are unsure about your professional future or if you want to make a risky professional switch;

 

• You will never have to worry about becoming sick or being laid off and not being able to repay your debts;

Disadvantages:

• The PPI does not cover for all kind of sickness, especially if you are prone to have one, so it could actually worsen your debt situation in this case;

 

• The PPI does not cover for all kinds of professional mishaps, so if you know that something is already wrong at work, you should look for other ways of securing your debt;

 

• Usually, PPI only applies after 90 days since you become unemployed, in which period you have to repay your debts by yourself;

While the PPI is in most cases a good way to secure your debts, you have to read through the terms of the insurance very careful before applying for it, in order to make sure that it's the best solution for your particular case.