Credit protection insurance, also known as payment protection insurance or PPI, offers financial assistance in the paying of debts in the event of job loss or inability to continue work, explains Investopedia. Such protection insures that a policy holder's credit rating does not suffer significant damage during times of unexpected financial hardship. Providers offer coverage up to 24 months under certain types of PPI policies.Continue Reading
Some other benefits associated with PPI is that customers can obtain this protection regardless of age, occupation, gender and tobacco-use habits, and the policy holder can decide on the amount of coverage necessary, according to Investopedia. Another potential advantage is that the loan providers themselves offer this protection service. Policy holders can also commonly make a claim after 30 to 90 days of continuous unemployment from the date when the policy began. Discount insurance groups offer lower cost policies than major lenders, as well.
Individuals should be aware that some PPIs may contain clauses and exclusions that need to be reviewed closely, warns Investopedia. Some exclusions may apply if the policy holder works part-time, is self-employed or is incapable of working any other job than his current job. Some serious health issues, such as cancer or heart attack, may also not be covered by PPIs.Learn more about Credit & Lending