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The Life Insurance Market
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Currently, if you take out a mortgage or a loan the person or organization arranging it for you will suggest you need Payment Protection Insurance (PPI) to protect yourself against unemployment, sickness and death. If you have a mortgage it is wise to have some form of insurance to protection. But is PPI the best product on the market?
A PPI policy will pay your mortgage repayments; generally it will pay out for a 12 month period. But what about other bills and living expenses? How would you cope?
Another name for this type of policy is Accident and sickness cover, with optional unemployment cover. But what happens if you’re off work for longer than 1 year or you can’t work again?
With most insurers, an income protection policy will pay out 50% of your annual salary, tax free. You can have this policy in place up until retirement age, some insurers offer cover up to age 70.
So why opt for a policy that just covers your loan or mortgage payment each month and only pays out for a maximum of 1 to 2 years?
My advice would be to speak to an adviser to discuss your needs and ensure you have the right policy to cover you and your family.
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