Payment Insurance, Another Pain In The Neck?
Contrary to other insurance policies required for different aspects of a loan risk, Payment Insurance is required by the borrower. Some very twisted minds may think there is some link between the insurance company and the lender, but… Is it logical? The answer lies in the very essence of this insurance.
Payment Protection Insurance
This is a policy which insures your payment, namely, covers your payments in the event that you, the borrower, may die or be unemployed, disabled or ill. This is a voluntary insurance that you hire to cover either the loan installments or the full balance. In the event of the borrower’s death, it should cover the whole balance and, on the other hand, should you be unemployed, it will cover one installment at a time, until you are employed again.
Only Mortgages?
No, this type of insurance can cover any kind of payment, like credit cards and other lines of credit, although our concern here is for loan or mortgage payments. It feels awkward to pay for the prime when one is in good health, but as we usually say, I would rather not need it.
