Income payment protection insurance is perhaps one of the most confusing of all the payment protection policies available. This is a policy that can be taken out to safeguard against the fact that you might become unemployed or incapacitated while paying back loans. It is a short term policy that would usually payout for either 12 or 24 months depending on the provider.



Income payment protection can be taken out for a fixed premium that is based on the level of your income, up to a certain amount, that you wish to cover. It also takes into account how old you are at the time of applying for the protection. If you were to find yourself unemployed by reasons not of your own, or you suffered the misfortune of an accident or illness then you would be able to claim on the policy.

Taking out income payment protection insurance would mean that you would be able to take care of your essential outgoings. One of the most important of these outgoings is your mortgage. Continuing to meet your mortgage repayment each and every month without fail is essential. If you got behind with the repayments by just one payment then the lender would be in touch with you. As you would not know when you would be able to catch up on your arrears and continue to pay your mortgage, the lender could start proceedings to repossess your home. However with a policy to fall back on you would not have this worry. You would be able to meet the repayments as you normally would while concentrating on making a recovery or finding work.

Any loan commitments that you had could also be taken care of this way. Loan and credit card repayments have to be kept up otherwise you will have a bad credit mark on file and this affects any future borrowing. This however could be the very least of your worries as the lender could take you to court and you might have a County Court Judgement against you. Your lender could also seek possession of your belongings to get back what you owe.

Your policy would also allow you to keep up with any other outgoings you pay to maintain your lifestyle. Heating, lighting and food bills could all be paid as could anything else. Income payment protection insurance has to be shopped around for as you would with any form of insurance. Policies differ with providers so you do have to check the terms and conditions of the cover to see what exclusions reside in the policy and when it would start and end. Providers have different starting dates for their cover. This is the amount of time that you have to be unemployed or incapacitated before you would be able to put in a claim. Usually this is between the 30th and 90th day. As no one knows what might happen in the future having a back up plan to rely on is essential and relying on savings you have accumulated or benefit from the State could be futile.