Christian Payment Protection Insurance
Christian payment protection insurance is a standard add on feature for many large dollar loans such as car loans, mortgages and other large bill obligations that could become a true nightmare should a disability or death occur. This financial security is formally referred to as PPI by the financial world, but can be sold under many other monikers such as accident, sickness and unemployment insurance or income protection insurance. In any case, this plan can offer a true measure of security for those who have grave reservations about how a large debt would be paid should a disaster strike. Any person with a small savings reservoir or someone heavily in debt would be a prime candidate for such a safety-net plan. Making sure that a plan is sound and customer friendly remains the responsibility of the buyer.
These plans, are usually broken down into two categories, credit life and credit disability are usually not long term solutions. In fact, they are more of a bridge or transition answer to help with immediate needs. In most cases payment protection insurance, if it is credit disability security, is only good for twelve to twenty four months in length. The plans are for short term health related disability, and in some cases stretches of unemployment that may occur. But though the security is nice to have, the payment protection insurance is not cheap.
The financial security plan which is under discussion here is offered by many online companies. But since their main interest is making money the monthly price tag can be off putting. Typical rates for disability payment protection insurance can run as much as thirteen or fourteen cents per one hundred dollars of an outstanding loan. Consider for a moment the offer that a car dealer makes to a customer on a twenty five thousand dollar new car. It certainly is standard mantra for the finance manager to push the customer to add this payment protection to the cost of the car, and of course, it just becomes part of the monthly payment. As an example, credit life to cover the balance of the car loan will pay for the entire loan in the case of the borrower's death at the cost of five cents for every one hundred dollars borrowed. For additional money, credit disability security can be purchased at about thirteen cents for every one hundred dollars of the loan.
So let's do a little math to see how much this protection will actually cost. The payment protection for the credit life will be a mere twelve dollars and fifty cents a month for the life of the loan. Based on a forty eight month payback, this protection will cost only six hundred dollars of extra payments, much of which often goes into the pocket of the car dealer. Now the disability insurance portion of this deal is much higher. The cost to be covered in case one falls off the roof and can't make the car payment for three months is fourteen hundred and forty dollars or thirty dollars a month. But the prudent and wise thing would seem to be putting that extra thirty dollars a month into a rainy day fund and pulling from it if needed for that roof fall instead of letting a car dealer make more money. And speaking of the credit life part of this payment protection insurance thing, isn't that what a good life insurance plan is for, so why pay for two life premiums?
Since all the cost of payment protection insurance is based on age, one might be more inclined to believe that for the single or newly married couple just starting out, perhaps this insurance might be a good idea. One can only advise that all factors be weighed and numbers be crunched to obtain enough information to make a good decision. All throughout life, we will always have people tell us that things that are bad for us are really okay, and that our right to do things is more important than whether they are inherently good or evil for society. God has very harsh words for the purveyors of rose colored values when he says, "Woe unto them that call evil good and good evil; that put darkness for light and light for darkness; that put bitter for sweet and sweet for bitter." (Isaiah 5:20)
Americans end up paying a lot more for their purchases when strong financial plans are not in place. For example, why pay six hundred dollars more for credit life to cover a car loan when a good term life insurance policy covering several hundred thousand dollars of debt may be available for the same price? Credit life insurance is at an all time low price wise and shopping around can get someone a much better dollar for dollar deal than paying for high priced niche payment protection insurance. And when it comes to buying that credit disability payment protection insurance, why is anyone buying something so big that savings won't cover the loan cost for a few months, or even twelve months? Could it be that the purchase really isn't needed and that someone really should have a more substantial savings account for those unexpected issues? Think of all the hands that are outstretched to take our money because of unwise purchases we make and the desire to have more than we can afford.
Christian Payment Protection PlansInvesting in payment protection plans can be a legitimate way of insuring that debts will not go unpaid in the event of unemployment or serious health issues. They can also be a costly and unneeded expense that will actually slow down the repayment process. This will all depend on the coverage provider and the terms and rates that are being charged to the consumer. Plans such as these are basically a form of insurance that may accompany a new loan or credit card account. The idea behind them is that the insured individual is protecting himself from the possibility of unemployment, serious health issues, or even death. Should a borrower become unemployed, these plans will cover the individual by making payments on the debt until the insured individual is employed again. If illness or injury that prevents the debtor from working should strike, again, the insurance plan will kick in and make loan payments. Tragically, if the insured borrower should pass away, most of these plans will pay off the entire debt, sparing the borrower's family from the burden of this liability. When rates are reasonable and the terms seem ethical, payment protection plans may be a good option for those who desire extra peace of mind when borrowing funds or adding indebtedness.
On the surface, such coverage may sound like a good idea. However, careful research and a thorough understanding of all fees and terms are necessary before agreeing to some of these payment protection plans. Some lenders will offer these policies at rates that are unduly high, or with coverage terms that have many hidden loopholes. Other lenders will even imply that the borrower must agree to the insurance in order to receive approval for the loan or credit card. In most cases, these practices should serve as a red flag for anyone who is considering moving forward with payment protection plans. Payments on these policies will be handled by simply adding an additional amount of money to a borrower's monthly payment. If the rates paid are reasonable, then it is simply up to the borrower to decide if this coverage is worth the extra investment. These policies are also available for loans that are taken out in more than one person's name. In most cases, there will not be a medical exam for potential policy holders that fall within a certain age range. Whether the debt under consideration is being used to purchase an automobile, a standard credit card, or even a home mortgage, there are products available to insure that payments will be made when a debtor can demonstrate that they are unable to do so.
There are generally limits on the amount of time that payment protection plans will continue to provide funds. Frequently, payments will continue for roughly twelve months or so before the policy has reached its limits. Of course, this can vary from policy to policy and lender to lender. Some policies will cover these expenses for a longer period of time. The thinking behind these plans is to help struggling families regain their economic footing by giving them a temporary reprieve from financial burdens. With some policies, an insured individual will need to have been off work for a minimum of 30 days before the coverage kicks in. For consumers who are self employed and do not have such benefits as sick leave, or salaries that will continue in the event of a brief illness or injury, payment protection plans can come in very handy. Before signing on with these programs, a borrower should make sure that they understand about any limitations or exceptions for coverage that may be detailed in the policy. To find out that coverage will not apply to certain situations, after that very situation has occurred, would be a real hardship for most policy holders. As with all insurance policies, understanding the fine print is very important. In general, the more comprehensive a plan is the better.
Before signing on for payment protection plans, careful comparison shopping is extremely important. The premiums for these policies can vary widely. There are, unfortunately, some organizations that will charge exorbitant monthly rates for this coverage. Since the premium is rolled into the consumer's monthly loan payments, a borrower may not realize that they are overpaying for these insurance products. When this is the case, the borrower may mistakenly believe that they are making significant progress on paying down a debt when in actuality a large chunk of the payment going to pay for the payment protection insurance. For this reason, a wise consumer will understand just how much this coverage will cost before signing any agreements. Any kind of financial dealing will require wisdom and careful research. The Bible talks about the great blessings that are available to believers who follow after God. "Blessed is the people that know the joyful sound: they shall walk, O Lord, in the light of thy countenance." (Psalm 89:15)
Unfortunately, there are Christian organizations offering payment protection plans that are not reputable. Some will misrepresent the cost of such coverage, even going so far as to imply that the coverage is free of charge. This is not generally the case. Others will imply that the coverage is free for a certain amount of time. But the consumer should watch out when the payments do kick in. These payments are likely to be quite high. While there are many honest and reputable providers of this protection, a consumer should always check out all of their options before making a final decision. There may be other insurance products that will better serve the individual needs of the borrower.