Payment Protection Plan
Reviewed by Sep 28, 2020| Updated on
Payment protection plans are an add-on service provided by a few lenders and credit card companies that allows borrowers to pause making their minimum monthly payments on credit card balance or loan when the borrower is facing a temporary loss of employment or health issues.
The lenders may also go on to wave off the unpaid due on the event of the death of the borrower. A payment protection plan will charge the borrower with a small recurring fee, which is charged on a monthly basis. The recurring charge will depend on the amount borrowed.
Understanding Payment Protection Plans
Payment protection plans come with predefined inclusions, exclusions, and eligibility criteria. Hence, the borrowers must clearly understand the norms before opting for it. It should not be the case wherein you make payments for the payment protection plan and later find out that your payment protection plan is not covering the situation under which you want to use it.
Therefore, the borrowers must clearly understand the range of coverage and opt for it only if it deems suitable for them. If there are any doubts around the norms of a payment protection plan, the borrowers must ask their lender for clarification without any hesitations.
General Eligibility Criteria for Payment Protection Plan
If you have met with an accident and injured severely making you unable to work you are qualified for, you should be under the care of a qualified doctor.
Payment protection plans require borrowers to be employed over a certain duration in order to be eligible.
Generally, the payment protection plans will be activated when your disability (temporary or permanent) keeps you away from work for more than thirty days.
Your payment protection plan offers coverage only for the period specified in the agreement. It will cease to provide the coverage beyond the date mentioned.
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