Payment Protection Insurance

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The payment Protection Insurance is popularly referred as the Credit Insurance and sometimes as Credit Protection Insurance and some other Insurance Companies call it Loan repayment Insurance. This is usually sold by the banks and other financial Institutions and it is mot to be confused with the Income protection Insurance. The payment Protection Insurance enables the repayment of the loans  even  in case his borrower dies, becomes very ill or meets with an accident which doesn't allow the borrower to earn the income to repay the loan amount.

The Payment Protection Insurance can be purchased to insure any types of loans like cars loans, mortgage loans etc. Sometimes  Even the Credit card agreements have this Payment Protection Insurance Cover. The Payment Protection Insurance is bought by the person who borrowed the sum of money from the bank or any other financial Institution and the premium is paid by the borrower himself however the claim amount would be paid to the person or the financial Institution  which has actually given the loan to the borrower or the policy holder.

This Insurance Policy usually covers the minimum loan payment for a limited period of time say 12 months. After the period of coverage the policy holder will have to find some other means of earning money to repay the loan. However most of the policies have a coverage period long enough to enable people to start working again and repay the loan amount.

This insurance can be a very useful insurance Policy however many of these Insurance Policies have been sold along with the loans, Credit cards and Mortgages. The misselling of this policy will leave the borrower with an Insurance Policy which is of hardly any use to them in case they make a claim. Various banks across the world have made huge amount of provisions to compensate the customers who were missold the policies.