Payment Protection Insurance (PPI) also termed as loan repayment insurance, loan protection or credit insurance is a loan or debt that you can get from an insurance company in case of any incident, loss of job or if someone fails to earn an income anymore due to some disability. The payment protection insurance policies are usually purchased to insure all kinds of consumer loans that mainly include home mortgage loans, car loans, loans from finance companies as well as the insurance regarding accident, life insurance, disability insurance and many more. The main purpose of PPI is to protect you or your family from an influence that most people have to face after an accident, unemployment, critical illness or death. Many companies offer various types of PPI Compensation to benefit the employee as well as their family.
Types of Payment Protection Insurance Compensation And their Benefits
There are different types of payment protection insurance compensation. These PPI compensation can greatly benefit the people in unexpected circumstances. Some of the most prominent types along with their advantages are given below:
- Life Insurance: Life insurance is one of the most widely used type of PPI. It is typically used to ensure that the mortgage of your house will be paid off even if you die or in case of your death, you want to leave behind a lump sum amount for your family in order to save them from other difficulties. The life insurance involves further two main kinds that include term assurance and whole of life policies. The former one is usually used as it covers a fixed period for example 10 years and is paid out if a person dies during his period while the latter one continues for an indefinite period and is paid out when a person dies irrespective of the time period when the death occurs.
- Mortgage Payment Protection Insurance (MPPI): MPPI assists you in getting mortgage payments at the moment when a person is incapable of doing work due to illness, accident or redundancy. This insurance payment is paid for a limited period. MPPI also helps a person in covering the monthly bills and mortgage.
- Income Protection: Income protection previously known as permanent health insurance is paid by the insurance companies when one is incapable of performing the tasks due to accident and illness. Income protection is further categorized into long term and short term. The long term income protection is paid out till retirement, return to work or death whereas short term income protection is paid out for a fixed period normally between a period of one to five years. This type of PPI assists a person in getting back to work if the person is made redundant due to sickness.
- Critical Illness Cover (CIC): In critical illness cover (CIC), the patient who is diagnosed with a severe disease such as cancer, heart stroke or heart attack, loss of limbs and multiple sclerosis is paid out in cash lump sum. This amount helps a person to pay for the medical treatment, specific equipment needed due to infirmity, to pay out the mortgage or for any other mobility aid.
- Private Medical Insurance (PMI): Private medical insurance (PMI) also named as health insurance is offered for private treatment if a person gets ill. This insurance includes consultation, surgery, nursing and hospital care. However, it excludes incurable diseases, pregnancy, addiction to drugs and cosmetic surgery.