When people are unable to pay their debts because of illnesses or some other problem they can cover their payments by reclaiming payment protection insurance (PPI). You may also hear this type of insurance being called repayment insurance. This type of insurance is very different from income or salary insurance. PPI insurance is attached to a specific line of credit but income insurance allows people to have money to pay for day to day expenses and whatever else they would with their salary.
People purchase PPI from the same lenders from which they got their loans. PPI can be taken out on all sorts of loans. It can be used for car loans, mortgages, boat loans just to name a few. Many credit card companies offer their own type of PPI as a part of the standard contract. If an individual ever needs to take advantage of the process to claim PPI back, they will not receive the money like they would with income insurance. The benefits go straight to the lender.
PPI will rarely cover more than the minimum owed each month. PPI policies only cover payments for a certain amount of time. Most payment protection insurance policies will only cover payments for a year. For most people that gives them enough time to regain their financial standing and resume making payments on their own.
The price of PPI will be different depending on the lender. However, a recent survey showed that the average cost of a PPI policy was between 15-20% of the total debt. And not all of them charge in the same type of manner either. Some polices payments are added upfront. While others charge on a monthly basis. In some instances the PPI policy will incur interest of its own. In those cases that will raise the cost of the payment protection insurance slightly.
The PPI claims calculator for checking credit card refunds is different. Since credit cards involve a credit line that is constantly changing, there is no way to charge based on the size of the loan. In addition, since many people never use their cards it would be difficult to charge upfront.
If a person was to use their credit card and miss a payment, however, the PPI policy would then kick in. Usually in the terms and conditions it is stated that a certain about of the fees associated with late payments will go towards PPI. In exchange for charging PPI fees the credit card company may hold off reporting late payments to the credit reporting agencies. They offer another type of protection. Other PPI policies offered by credit card companies protect the interest rates.
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