Most conscientious loan borrowers will often worry about what they would do in the event they were unable to work because of injury, illness or if your position at your place of employment becomes redundant. There is something called PPI which was created for these sorts of situations.

The abbreviation PPI stands for Payment Protection Insurance. This form of insurance was created to help cover costs of bills such as a mortgage loan, credit card repayment, or other monthly loans in the event you are injured or are unable to work due to illness or due to redundancy. The PPI will cover a percentage of certain loans monthly for up to twelve months and at most up to twenty-four months.

Before you decide on purchasing PPI you should make certain that it is well suited for you. You do not want to fall victim to a high pressured sales associate or lender whom is trying to pressure you into buying their plans.

It is also important that you understand that there is quite a bit of criteria you will have to meet in the event you do need to file a PPI claim. Please find some of these below:

• Make sure that you list any pre-existing medical conditions. Some companies will not even sell you the PPI once they are aware of them. Better to know upfront.
• Your age must be between 18 and 65.
• You must work at least sixteen hours per week.
• If you are going to claim unemployment you must have been employed with the same employer for a minimum of 12 months prior to making the PPI claim.

You should also be aware that some medical conditions such as back issues or even stress related issues may not be covered under the PPI policy. Be sure to ask this. You would hate to need to file a claim only to find out you would not be covered.

There has been quite a bit of problems over the years with loan companies trying to force potential borrowers into purchasing high priced payment protection insurance from them. They sometimes have promised lower rates, or said that if the borrower did not purchase the PPI then they would be denied the credit. This is something for another article, however, this is now called mis-sold PPI, which if you fell victim you may be able to reclaim some money back.

If you decide that you want to purchase Payment Protection Insurance and it is worth it to you, be sure to check prices, as it could add up from 60-65% to the total of your loan. Be wary of high pressure tactics, and watch out for poor sales practices.