Nobody likes to think about bad things happening to them, so it should probably not be a surprise that many people fail to take out protection insurance that would help them or their family in the case of accident, illness or death.
When people consider this kind of cover they typically look to life insurance, but cover that can protect you if you have an accident, or fall ill, is also an important thing to consider.
Payment Protection Insurance / Short Term Income Protection Insurance
The plan will have no cash in value at any time, and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Payment Protection Insurance and Short Term Income Protection Insurance can provide a monthly income to help cover your regular outgoings if you can’t work due to an accident, illness/injury or, often as an optional extra, unemployment.
There are important differences between these products, and long-term Income Protection Insurance. They include a limit on how long the replacement income will be paid for – usually between 12 and 24 months. By contrast, Income Protection Insurance will pay out for as long as you are unable to work (up to the policy expiry).
Unemployment cover is often an optional extra on these policies, or can be purchased as standalone cover.
Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against the loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk
| Beginner's Guide to Protecting your Future | Payment Protection Insurance / Short Term Income Protection Insurance | What is Critical Illness Cover? | What is Income Protection Insurance? | What is Level Term Assurance? | What Is Mortgage Life Assurance? | What Is Whole of Life Assurance? |