Those of you who are taking out a loan or credit card would be wise to give some thought to covering their monthly repayments with payment protection insurance (PPI). Cover can be taken out to insure against the fact that an individual might have to take time off work if they should have an accident, suffer illness or become unemployed through no reason of their own.



While, if this should happen, your circumstances would change, you would still be expected to pay all your commitments. This would perhaps mean struggling to find the money needed or raiding your savings account and eventually depleting your funds. A better alternative - and one which can give peace of mind - is to consider protection insurance.

Payment protection insurance could give you an income to continue financing your loan, mortgage or credit card repayments after you have been out of work for between 30 and 90 days. It would then continue to give you security for between 12 and 24 months, depending on the provider. The majority of standalone providers will backdate the cover to the first day you came out of work, so this is an added benefit to look out for when choosing a policy.

As with all types of protection insurance policies, there are exclusions which are frequently found in the cover as standard and these include protection not being suitable for those who are self-employed, suffer a pre-existing medical condition, are retired are who only work on a part time basis. These are what you need to check against your circumstances as in the past policies have been sold to those who were not eligible to claim.

The much publicised mis-selling of payment protection (it is regularly branded a ?rip-off? in the Press) has given the insurance a bad name and caused the consumers a loss of faith in it. However, it is an invaluable product to have and you can find the right protection by doing a bit of research.

Sadly, the high street lenders and banks are often guilty of charging over priced premiums for poor quality cover which they have been found to coerce an unwitting customer in to buying. Consumers should be aware that the cover is not compulsory and despite what your loan, mortgage or credit card providers says, you do not have to buy the insurance from them.

You are free to shop around for the payment protection with standalone providers. Doing it this way you can save literally hundreds of pounds in premiums for the cover.

It is important to realise that payment protection is not faulty. It is a worthwhile product to have in your corner if your circumstances permit it. It is the way that cover has been sold and is continuing to be sold by some firms that has caused the majority of problems. If payment protection is to work for you then it is essential that you fully understand the terms and conditions of each policy before you make a choice as to which one to buy.