Consumers can purchase payment protection insurance (PPI) alongside mortgages, auto and personal loans and some credit cards. The purpose of PPI is to make monthly payments for you in the event you suffer a loss of income due to illness, accident or loss of job and find yourself unable to meet your monthly obligations.
Although most often sold alongside mortgages, PPI for credit cards is available. It is important to decide if it is a purchase that makes sense for you. PPI can be expensive, but it can also safeguard your financial health and future credit scores by making sure you don’t go into arrears with a lender.
PPI has been in the press a great deal as of late due to the mis-selling scandal. A large number of banks and financial institutions have been guilty of mis-selling these policies. If you are considering a policy, it is imperative that you do your homework. You must know exactly how much the policy will cost you, exactly what the coverage amounts to and what eligibility requirements there are both at the time of purchase and upon making a claim. If you work with a reputable lender and ask the right questions, you can end up with a policy that is right for you.