Meet Alice.
As a mother of three, she’s always in a hectic rush, trying to complete all the tasks on her never-ending to-do list. Alice also works as a part-time senior patient caregiver. She loves her job and kids and is an exemplary mother and employee. Unfortunately, bad things still happen to good people. A couple years ago, Alice lost her husband Tim to cancer, making Alice the soul provider for her family.
So, when Alice in her everyday hustle and bustle slipped on the stairs dislocating her ankle, she was distraught over more than the injury. Who would help with the kids? What about her job? Hearing that surgery would keep her off her feet for six months, another concern came to mind… What about her loan payments?
Then she remembered her payment protection insurance on her loan. She called her advisor at Innovation and informed them of her circumstances. In turn, they triggered the process for her to claim her disability payment protection insurance. Alice could rest easy knowing that her loan payments would be taken care of completely. This would allow her to focus on more pressing matters such as the well-being of her kids, recovering post-surgery, and finding the right medical care for the rest of the year.
What is payment protection insurance?
With payment protection insurance, the insurance service provider would pay Alice’s loan payments since she was seriously injured and unable to work.
Of course, payment protection will only make payments out to a pre-specified maximum limit and comes with some terms and conditions. Still, it makes a world of difference when you’re already emotionally stressed out due to a physical disability or serious injury.
What is the pre-specified maximum limit for payment protection insurance in case of a disability?
It depends on the kind of insurance you opt for. Single premium insurance can provide up to $1,500 per month up to a cumulative total of $108,000. Or you could even get 3% of the insurable outstanding balance at the time any incident or illness occurs that leaves you disabled. This amount is capped at $3,000 per month. Now, Alice had opted for the first kind, so she could rest assured that she would be able to make her loan payments that fell below $1,500 per month.
What kind of eligibility is required to be able to claim disability insurance?
To claim your disability insurance, you need to have worked for at least twenty hours a week for two consecutive weeks before making the claim.
Alice had definitely been working for the two weeks before her slip down the stairs. She had also not attempted any kind of self-sabotage and was in the clear to receive her insurance claim.
For how long would the benefits be provided?
On a personal loan, benefits could last from 60 months to 72 months depending on the kind of insurance you have opted for. For Alice, that would mean that she could technically not have to make any payments till she was back on her feet and able to comfortably earn her income again. Considering her recovery period of six months, and any additional post-recovery grace period she would need, Alice’s loan payments would easily be covered by her creditor insurance.
When can you enrol in payment protection insurance?
You can enrol in payment protection insurance at any time within the age range of 16 to 69. Once you reach the age of 75, your coverage will cease to exist. While you should not wait to get payment protection, keep in mind that your maximum term will be 15 years. So, you need to opt for it strategically in line with your loan term or any other debt repayment terms. Now Alice opted for her payment protection insurance right when she was approved for her loan. Since it had only been one year since she had taken the loan, she was very much within the benefits term and could get her full claim successfully.
Just imagine if Alice did not have payment protection insurance in case of disability and had suffered this serious injury? She would have had to depend on her extended family members for support. Or she would have had to take on more debt, like maxing out a credit card. A definite consequence of not being able to make her loan payment, her credit score or credit rating would have tanked. She would have to make serious changes to her lifestyle, limiting her expenses even further while still maintaining adequate care her three children.
Luckily that wasn’t the case. As you can see, Alice was able to make full use of her payment protection insurance. She had learned that life could be extremely unpredictable, but with the right coverage in place, manageable.
Want to discover the best payment protection insurance for you? Speak to one of our advisors today! No matter what happens, remember, you too can be like Alice — ready to take on life’s curveballs — with payment protection insurance on your side.