When we start to tighten our belts attention also turns to ways we can best insulate ourselves against the worst impacts of financial uncertainty. There are a number of financial insurance products on the market which can help consumers avoid the worst effects of a downturn. The income, mortgage and payment protection insurance Northern Ireland market can at first seem confusing and complex, but a basic understanding of the terms involved can help someone negotiate this potentially useful sector.
All of these phrases refer to a similar product which will provide cash handouts by way of a partial replacement of your income if you lose it due to falling ill, suffering an injury after an accident or being made involuntarily redundant.
Payment protection insurance, or PPI as it is commonly known in the industry, is a broad term for this type of cover, which can be taken out for specific financial needs.
Income payment protection insurance will replace someone’s regular salary up to a certain limit for around 12-24 months depending on the provider if they cannot go to work because of sickness, involuntary unemployment or an accident.
It is designed to make sure someone can keep up with things like bills, loans, and all the essential outgoings including food costs while they concentrate on getting their health back or finding a new job. The main benefit is that it helps to take away stress during a difficult time and can also help to safeguard someone’s credit rating, which must remain intact if they are to have a smooth route to borrowing in future.
Income payment protection is different to income protection, the latter of which is a more long-term product covering incapacity only. Income payment protection insurance will account for a significant portion of your income rather than all of it, with most policies starting at 50 per cent of what you would regularly get if you were working.
Mortgage payment protection insurance (MPPI) is a very similar product, but is more focused towards enabling you to pay for your mortgage. Again, it will not account for all of your home loan-related costs but a significant portion of them. It will not only provide a sum towards the repayments themselves but also towards the interest on the home loan, plus associated costs such as home and contents insurance and even things like the council tax on the home, the household grocery bills, and electricity and gas costs.
Other income, mortgage and payment protection insurance Northern Ireland products include cover for things like loans and credit cards. Loan insurance will help you to pay your regular commitments, and credit card cover will normally help with a percentage of the outstanding balance after a successful claim.
Getting income, mortgage and payment protection insurance Northern Ireland policies is not always quite as straightforward as obtaining something like car insurance. Mortgage payment protection can sometimes be tacked on to a home loan by a bank or building society. These are ‘off the shelf’ or ‘over the counter’ policies and might not be as effective as more standalone products.
Instead it can sometimes pay to get mortgage and payment protection insurance Northern Ireland policies from more independent companies, or to at least shop around a wide spectrum of providers before deciding on cover.