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Top risks covered by payment protection
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Tags: payment protection, insurance
This list sets out the main types of risks covered by payment protection insurance, consisting of accident, sickness and unemployment. The policy can be used to protect general income or a specific financial committment, such as a mortgage loan. This type of cover pays a monthly benefit directly to the policyholder should any of these risks arise and they prevent that policyholder from working, and therefore earning an income.
| | Accident: If you suffered an accident that prevented you from working then you would be able to claim on your payment protection plan. Accidents are a factor of life and they are bound to happen from time-to-time. This type of policy allows the policyholder to reduce the finance risk of an accident affecting income. |
| | Sickness: As with the case for an accident, the plan would payout a monthly benefit of the policyholder suffers illness that prevents them from working. Although some employers pay sick pay many do not or only pay for a very short period of time. Payment protection allows this risk to be reduced for up to 24 months, which is the maximum payment period. |
| | Unemployment: If the policyholder suffers forced redundancy then the policy would payout a monthly benefit either until the policy term ended or the policyholder returned to work. The maximum possible time that someone can claim for is 24 months (provided the 24 month option is chosen). It should be noted that the policy does not cover voluntary redundancy or a dismissal. |
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jamiepw
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Payment protection insurance
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