If you were to lose your income after becoming unemployed and had taken out unemployment protection you would be glad you had paid the small premium each month. You will get cover for a small premium each month if you choose to take it with an independent payment protection provider. However if you choose to take it out with the lender when borrowing then it is a different story and you will pay high premiums because lenders charge high premiums. This is to make £4 billion in profits each month and makes up for the low rates of interest they offer on special deal loans.
When taking out unemployment protection you have to first decide which policy you need for your needs. You are able to choose from income, loan and mortgage payment protection. Which policy you would be better off taking would reflect on what you have to payout each month.
Loan cover taken out as unemployment protection would provide you with the sum you insured against when taking out the policy. This would allow you to continue meeting any loan or credit card outgoings that you have to make each month. You would not have to worry about falling behind into arrears and the lender taking you to court to seek to get payment. The judge could order that bailiffs come to your home and this means they would take your possessions to sell. If you have taken out a secured loan then you could find the lender choosing to seek repossession of your property.
Mortgage arrears would also mean that the lender would take you to court if you cannot afford to catch up on your arrears. Of course at the same time you would also have to carry on meeting the normal payment of your mortgage each month. However if you do not have an income you would not be able to afford the mortgage payments and the lender would have no choice but to take you to court and repossess your home.
If you want to cover loan and mortgage payments together along with any other outgoings you have to make each month then income payment protection would be a more suitable protection policy. You would be able to insure up to a certain amount of your own income each month and then receive this sum back as a tax free sum. You would be able to keep up with heating, lighting and such as food bills each month with no worries.
Unemployment protection might be an additional sum that you have to pay out each month but it is well worth the money when you face the possibilities that could happen if you do not have the money to pay your outgoings. With a standalone provider you would be charged a premium based on your age and how much you wanted to protect. With an age based policy even younger first time homebuyers with tight budgets can now afford to protect the roof over their head.
Author Resource:-
Simon Burgess is Managing Director of the award-winning British Insurance (http://www.britishinsurance.com), a specialist provider of low cost income payment protection insurance (PPI), mortgage payment protection insurance (MPPI) and loan payment protection insurance.
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