Credit Card Payment Protection Insurance is also commonly called as Payment Protection Insurance or Income Protection Insurance. The monthly benefit amount that these policies pay out can be used to cover your credit card bills. Such policies cover you for unemployment and redundancies, accident and sickness.
What is Credit Card Payment protection Insurance?
Credit card Payment protection insurance is a specific type of insurance that falls under the broad category of Payment Protection Insurance policies, also known as PPI. If your insurance is based on just your income, it will fall broadly under the category of Income Protection Insurance. These are types of insurance policies that enable you to meet your financial payments, should circumstances beyond your control, like involuntary redundancy; mean you are without an income to continue to meet your financial obligations.
How does credit card payment protection insurance work?
Credit card payment protection insuranceeffectively insures your credit card repayments. So should you find yourself out of work through no fault of your own, your credit card protection cover would be activated and you would begin to receive a tax-free monthly income to use to pay your credit card bills. Credit card payment protection insurance provides you with peace of mind as well as financial assistance should the unexpected occur. It must be noted that in order to cover your expenses for credit card, you have to buy either a Best Insurance Payment Protection Policy or Income Protection Policy.
In order to qualify for Best Insurance’s Payment Protection Policy, you should have a mortgage, loan or rent. The maximum amount most Payment Protection providers allow in this type of product is just the amount equal to your mortgage, loan or rent. However, Best Insurance provides an additional allowance over and above the mortgage, loan or rent that can be used by you to cover your credit card expenses. This additional allowance amount is normally half of your mortgage, loan or rent. These additional allowances can be used by you to cover your outgoings against your credit card expenses. The maximum benefit you can get under Best Insurance’s Payment Protection Insurance is up to 50% of your monthly gross income. However, if you do not have a mortgage, loan or rent, you can still protect yourself for your credit card protection using our Income Protection Insurance. Best Insurance’s Income Protection Insurance allows you to insure upto 50% of your monthly gross income. The benefit amount can be used by you to pay your credit card bills and other essential outgoings that you may wish to protect yourself against.
If you find all these too confusing, please do not hesitate to call us on 0330 330 9465 or chat with us. Our advisors will be more than happy to provide you with the right assistance.
When would I need it?
- With rising redundancies in the current economic climate, many people face uncertainty about their job security and ability to meet financial commitments.
- Even if redundancy isn't a concern, unexpected events like illness or accidents can leave you without a regular income.
- Credit card payment protection insurance (PPI) offers support by covering your credit card payments during such times, helping reduce financial stress so you can focus on recovery.
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To file an income protection insurance claim, contact your claim administrator immediately using the details in your policy. They’ll guide you through the process, including forms and required documents. Claims typically take around 30 days; if delayed, follow up with your insurer. For excessive delays or unfair denials, escalate to the Financial Ombudsman Service.
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How does income protection insurance work?
Income protection insurance works like any other benefit policy. After purchasing it online or through a broker, you’ll pay a monthly premium to keep your cover active. Once set up, there’s an Initial Exclusion Period (IEP), usually around 120 days, during which you can’t claim for unemployment. After that, you’re covered for accidents, sicknesses, or job loss.
If you need to claim, contact your claim administrator right away. You’ll need to provide evidence — like medical records for illness/injuries or employer documents for unemployment. Once approved, you’ll receive monthly payments until you’re back at work or find a new job. If your benefit period ends before then, you’ll need savings or another plan in place, which is why opting for a longer benefit period can be worth the extra cost
Several factors can affect how much your income protection insurance costs, including:
If you want an accurate estimate for what an income protection policy tailored to you might cost, it’s worth contacting a broker directly. You can give Best Insurance a call on 0330 330 9465 to get a quote today!
Frequently Asked Questions
Your income protection insurance policy covers your income if you’re too sick or injured to work or if you’ve been made involuntarily unemployed. You agree on an amount you’d like to be paid if this happens — called a ‘benefit’ or ‘benefit amount’ — and if you find yourself unable to work, you make a claim. Your benefit will cover whatever you need it to cover, whether that’s your mortgage payments, your rent, your bills, or even your groceries.
If you successfully make a claim on your income protection insurance policy, you’ll be paid out the benefit amount you selected when you first purchased cover. This will usually be up to either 65% of your income or £2,500.
Yes, income protection insurance is worth the investment, even if you are in the UK. With an income protection insurance policy in your back pocket, you won’t have to rely on your savings, state benefits like Universal Credit (which often aren’t enough to live off of for long), or handouts from loved ones to keep your head above water in the event that you couldn’t work. Think of it like paying into your rainy-day fund; one day, you’ll need it.
What’s the difference between income protection insurance, redundancy protection insurance, and critical illness insurance?
With a vast range of products on the market, it is important that you spend some time thinking about what type of credit card payment protection insurance is going to best suit your circumstances. Best Insurance can make the process of choosing a policy even easier by offering instant online quotes for CCPPI so you can search for a policy from the comfort of your own home. When choosing credit card payment protection insurance, you will want to consider how big a premium you are happy to pay each month, how much you want to insure against each month and also how long you would need the payments to be made should you find yourself suddenly out of work.
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