Credit insurance advice
There are two types of credit insurance, one for individuals and one for businesses. We are going to look at the credit insurance for individuals and ask some simple questions, do we need credit insurance and are we obliged to have credit insurance when taking out a loan, mortgage or credit card. Credit insurance is a safety net in the event that you get ill, sick, loss of job or made redundant. Credit insurance can help but you must be careful of loopholes and buying insurance when you do not need it.
What is credit insurance for
Credit insurance is assurance that a form of credit will be paid back to the company lending it, it will cover them in the event of.
- Losses his or her job
- Becomes sick
- Disability
- Death
- Made redundant
There are five types of consumer credit insurance available.
- Credit insurance for the loss of life, this means that in the event of death the lender will be paid back in full.
- Disability insurance, if you become disabled then the insurance company will continue paying monthly payments for a time stated in your policy.
- Credit employment insurance will in the event of you becoming unemployed or redundant carry on paying your debts for s specific time, which will be stated in your policy.
- Personnel property insurance purchased with borrowed funds protects you in the event of any damage to your property.
- Credit fraud insurance protects you if your card is lost, stolen and then used for unauthorised purchases.
Good points for credit insurance and why it is best to have it.
- There is no need for a medical check up when getting credit insurance.
- It covers you in the event of most accidents and mishaps
- It covers you in death so loved ones are not left carrying the burden.
- Peace of mind in the event of losing your job or becoming redundant.
Payment protection insurance PPI
Payment protection insurance is to help you if you cannot keep up payments on your loans, credit cards, Mortgages, Credit cards and any other credit agreement in the event of any of the above. PPI is a touchy subject because many banks and finance institutions have been selling PPI wrongly and not giving the option to consumers if they wanted it or even needed it. Banks and other finance companies have been selling this service for years and have now had to pay back millions to people who where sold Payment protection insurance in the wrong way.
Bad points of Payment protection insurance plans and reasons it was sold wrongly
- Where you told or even made aware that PPI was optional.
- Most people are told you have to have it if you are working and have a full-time or part-time job.
- Students and self employed workers where even sold it knowing that they would never get a successful claim because they are excluded in the policy.
There are so many loopholes in most payment protection insurance policies that made it very hard for anyone to be able to actually make a successful claim in the event of losing your job or becoming ill. Policies where even sold that did not even cover the full payment period just the loan amount making it a catch 22 policy that would never work.
