If you own a credit card or have taken out a personal loan then at some point you were probably offered payment protection. Although many people take out payment protection insurance, there are only a few who can actually benefit from it; often you are just wasting your money by having it.
Payment protection insurance is an insurance that is offered on credit cards or loans that will cover your repayments should you fail to pay them due to sickness, an accident or unemployment. The payment protection insurance will cover your payment up to a year if you should ever end up unemployed, sick, or injured. As good as it sounds, payment protection insurance usually costs a lot of money. Typically the payment protection is usually charged as a percentage of your balance, which can be very expensive if you have a large balance that is owed.
Payment protection insurance can benefit some people, however there is often a very strict criteria that needs to be met in order for you to make a claim. However if you are prone to illness or if you engage in high-risk activities such as sports, then you may want to consider payment protection, as it will cover you if you are ill or injured.
If you consider getting payment protection insurance then you should look at other alternatives that are available. Often you will find a stand-alone payment protection policy from an independent company, and are often a fixed price, which can be cheaper than what your creditor is offering. If you already have an insurance policy, you may want to see if it also covers payments on your debts; if you are already paying a policy that covers payments then it will be a waste of money to take out additional payment protection.