Payment Protection Plan

A payment protection plan, in short, is a means by which you protect your investment or purchase. In the case of your mortgage, a payment protection plan is insurance you take out to protect you from events that would affect you financially and leave you unable to pay your mortgage. The situations may include events like he lots of your job, illness that leaves you unable to work, or involvement in an accident that leaves you incapacitated. If you are unable to meet payments on your mortgage or any other large loan if this or other financially difficult situation should occur, a payment protection plan simply means that your mortgage is paid for a period of time, usually 12 months, while you recover and get your financial feet back under you.How Does a Payment Protection Plan Work?If you can't work for a period of more than 30 days, if you have a payment pension plan in place and you meet your policy's criteria to receive coverage, you should be able to make a claim and have your payments made, usually for up to 12 months. In some cases, payments may be made for up to 24 months, with certain types of redundancy insurance. There are, however, exclusions where the policy may not cover you. These are discussed below and you should be aware of them.What Doesn't a Payment Protection Plan Cover?A payment protection plan is fairly comprehensive insurance cover, but there are certain exceptions to it where it will not apply. If you are self-employed, for example, redundancy cover is different as compared to someone who is in full-time employment and loses a job. If you are self-employed, you will have to have stopped working altogether because of the injury, illness or accident itself, for example, not because you are simply experiencing a lull in your work.If you are in full-time employment, there are some cases where a payment protection plan also will not cover you. For example, voluntary redundancy will not let you claim unemployment insurance. Because this is a choice you have made and not something that happened out of your control, any claim made would be void. If you're still not sure what is and is not covered, check with your insurance advisor. Your advisor will be able to explain payment protection in more detail and will also be able to make sure you choose the best plan for you.