This type of insurance is part of the payment protection insurance industry and is geared specifically towards people carrying credit cards. Unlike broader policies, this type of cover is designed only for cards and will not protect things like separate loans and mortgages. Even so, it will act in much the same way in that it will provide a regular sum of money to help pay back the card debt in the event that someone is unable to pay it off due to accident, sickness, or involuntary redundancy.

Most companies will pay a straightforward percentage of the outstanding balance for every month that you are unable to pay through no fault of your own. A company might agree to pay 10 per cent meaning, if you had an outstanding debt of £1,000, their first payment on your behalf would be for £100. When it comes to the premiums involved, they are either one straightforward sum or are calculated in relation to the size of the balance. To give an example, a company might charge 80p per £100 that you owe, meaning if you owed £1,000 pounds on a card, you would be charged £8 for the premium that month.

As they are only designed to bridge the gap between getting better or finding a new job, policies will not pay out indefinitely, and will usually stop after 12-24 months depending on the provider. Unsurprisingly, they will also stop as soon as you find employment or recover and return to your old job. Some other rules which normally apply to this type of insurance include a requirement that you are 18 years of age or over and under the statutory retirement age in order to qualify for cover. A person will normally need to have held down a full-time job for a set period to qualify, around six months is the usual requirement.

Most people might have encountered credit card insurance already without fully realising it. Some providers will offer up this type of policy at the same time as they supply someone with a credit card. It is important to be aware of this practice, as these types of policy can be of poor value. Some customers might be tempted to simply sign on the dotted line without shopping around for alternatives - the reality is that standalone providers like protection specialists British Insurance can typically provide credit card payment protection for a much smaller price.

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A tracker mortgage is a very commonly used product in the UK and is nothing but a loan secured against a real estate property and the interest that is charged promises to have a definite relationship with the base rate of Bank of England. Tracker mortgage rates are usually cheaper than fixed or flexible rate mortgage. However, the unique part of tracker mortgage rate is that even though the cost of a tracker mortgage dips with falling interest rates, it does not guard the owner against rising interest rates.

When it comes to remortgaging, individuals get mostly attracted to cheap mortgage rates which in most of the times happens to be a discount or tracker mortgage. However, there is a subtle but important difference between tracker mortgage rate and discount mortgage. While discount rates are connected with the standard variable rate of the mortgage provider, a tracker mortgage is linked with the base rate of Bank of England. A tracker mortgage mirrors the current financial situation and its interest rates are cheaper than fixed mortgage rates.

If you are looking for small payments at the early stages and willing to take the risk of higher payments in the future, then tracker mortgage are best suited for a person like you. However, like all loans, you must read the fine print before opting for tracker mortgage. If the interest rate is set well below the base point for 2 years, you can have some lenders stating that they will assess the situation once the base rate falls too low or some even mentions that you have to a pay a minimum rate if the interest falls much below expectation. Such conditions defeat the entire purpose of opting for a tracker mortgage.

You have to be intelligent to know when to go in for a tracker, fixed or capped rate option. At a time when chances of base rate falling are very high in 2009, it would be only but foolish not to opt for a tracker rate mortgage. As a borrower, you can also look for trackers that provide a drop lock choice which enables you to move to a fixed rate any time you wish. So now is the right time to opt for tracker mortgage rate with interest rates falling sharply.

By Nancy Dodds of Financemate.co.uk

©2008 Enhanced Wealth News. All Rights Reserved.

This type of cover is often bunched in with the wide range of phrases falling under the payment protection insurance market. Cover which only protects a credit card, however, is quite straightforward and widely available, and in some cases cheaper than a very broad policy covering a number of debts.

Part of the catch when it comes to holding a credit card is the fact that smaller repayments usually incur a greater rate of overall interest. If someone starts to really struggle they can end up with a stain on their credit rating and can even end up being hassled by debt collection agencies - a court case may even be on the cards in some cases. The stress which follows can be exacerbated by the fact someone is unable to pay simply because they have lost their income through no fault of their own due to accident, sickness, or involuntary redundancy. These are the types of circumstances credit card payment protection insurance normally covers.

A prospective policy holder will normally need to decide what level of outstanding credit card balance they would like covered. The company will often put a limit range on this which means, for example, someone will need to insure at least £1,000 up to a maximum of £10,000. An insurer will normally offer to pay a set percentage of the outstanding balance for every month someone finds themselves without an income. To give an example, if someone has a credit card debt of £2,000, and the insurer has agreed to cover 10 per cent, the first payment will be for £200.

The cover will normally last for a set period from a few months up to a maximum of approximately a year, depending on the insurer, or until someone finds a fresh income or recovers from an illness and is in a position to start paying the credit card bills again themselves.

Costs of premiums tend to vary dramatically, and many credit card companies will offer someone a level of protection at the same time as they offer them the plastic. This type of cover can sometimes be best avoided. Instead, standalone providers like payment protection specialists British Insurance, can offer credit card payment protection insurance at a lower price without scrimping on the quality of cover. Company managing director Simon Burgess said: “High street card providers can be responsible for overpricing their card protection. We don’t take advantage and we don’t offer loans - we supply sensible cover at sensible prices.”

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You choose the amount you want to protect of your monthly mortgage repayment, up to a limit stated by the provider, against accident, sickness or unemployment and then claim this sum back if you fall victim to one of these events. The sum of money would be used towards servicing your mortgage repayments for the period defined in the conditions of the policy and would go a long way towards helping you to remain out of mortgage arrears.

If you choose standalone British Insurance then you can choose the type of mortgage protection cover you need. You can take out accident, sickness and unemployment protection in one policy. However your circumstances might dictate that you only need to insure against unemployment alone or incapacity alone. This will go towards deciding how much the premium would cost you along with how old you are when you apply for cover and the amount of your payment you choose to protect. As the protection is based on your age this means younger first time buyers can now afford to cover their mortgage repayments where previously high costs for cover meant it was out of their reach.

British Insurance offer no excess on their protection as they date the benefit back to day one of you falling sick, suffering an accident or becoming unemployed. A claim on the benefit could be made after just 30 days and payments are received for up to a maximum of 12 months before the cover expires. If you shop around and compare costs of premiums with other providers then check the conditions of the protection policy as there are some providers that offer 24 months of insurance. You also have to find out how long it would be before you could put a claim in as with some providers this might be 90 days at least.

Mortgage protection cover can do an excellent job of helping you to remain in your home as falling into arrears and not having money to catch up would see the mortgage lender taking you to court to claim repossession of your home and have you evicted. The judge might rule in their favour and this would mean you having to leave everything you have built up over the years. Relying on savings could be risky as they might not last for the duration of your unemployment or incapacity. If you believe that the State would step in and help out by providing you with your mortgage repayment then you could also be let down.

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Independent specialist provider British Insurance allow you to protect up to so much of your monthly mortgage repayment against the possibility of losing your income after being unemployed, suffering an accident or an illness. The sum of money you insure with mortgage insurance cover would be the payment you would receive back each month for the duration of the policy. You would use this income to keep on top of your mortgage repayments and so not risk getting into mortgage arrears and not having the income to catch up on them.

Taking your insurance with standalone leading specialist British Insurance you could make a claim on your mortgage payment protection insurance from day 30 and they would backdate to the first date of you becoming unemployed or from being incapacitated. The policy would then last 12 months maximum providing you with your income each month. If looking with other payment protection providers you should check when the policy would start as some providers ask you wait as long as the 90th day before making a claim. The terms also need checking to see how long you would be protected as some payout as long as 24 months. When looking at the terms and conditions you need to see what exclusions have been included as there are some in all cover. British Insurance add in just the most basic few but other providers could add in more and these need checking against your lifestyle to ensure you would be eligible claim.

Mortgage insurance cover would greatly ease the worry of falling behind on mortgage repayments if you should lose your income as a result of unemployment or incapacity and is a more reliable option than turning to using savings or applying for benefits from the State. You would have to be eligible to claim money from the State and even then you would currently have to wait for many months before seeing any income. The income you did receive would also only pay towards so much of the interest part of the mortgage repayment. Savings could also be a let down as they might not last for the duration of your unemployment or incapacity. It can take many months for you to recover and get back to work and with jobs not being easy to find the same could apply if you are unemployed. At least with mortgage payment insurance you would have security for the term of the policy.

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A policy can be taken by protecting up to so much of your monthly mortgage repayment, which your provider would pre-agree upon when you take out the policy, against the possibility of being unable to work through accident, sickness or unemployment. This sum of money would then be paid back as an income each month for the term set by the provider.

The income you received would go a long way to allowing you to keep on top of your mortgage repayments and stop you from falling into mortgage arrears. Mortgage arrears can lead to you losing your home if you are unable to come to an agreement with the lender to repay. Most lenders will give you some leeway by allowing you to payoff what you owe as long as you are able to continue meeting the agreed repayments. However without an income coming into the home this would not be possible and they would take steps to seek repossession of your home.

Some providers such as ethical British Insurance will offer mortgage cover with no excess. They backdate the benefit to day one of you being unemployed or from suffering incapacity and allow you to claim from day 30. You would then be secure for 12 months as this is how long British Insurance would supply your income. When shopping around for the protection always check to find out when you would be able to claim as there are some providers that could ask you wait as long as 90 days. You also need to check to find out how long you would receive payments as some providers would continue providing you with benefit for 24 months.

Mortgage cover is a better lifeline compared to relying on State benefits to provide you with the sum to maintain your mortgage repayments. You would have to meet certain requirements set out by the State in order to be eligible to claim and even if you were you would only get a sum of money towards paying the interest part of the mortgage repayment. Currently you would also have to wait for several months before you would see any benefit and by this time you could already have fallen into mortgage arrears. If your safety net is savings then again you should think twice as savings might have to be relied upon for many months and they might not last.

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You would take on the policy by protecting a portion of your monthly mortgage repayment against accident, sickness and unemployment which the provider would pre-agree on at the time of taking out the cover. If you then were to fall victim to one of these events you would be able to claim on the policy and receive the sum you insured each month as a tax free payment.

If you went with ethical independent provider British Insurance you would claim from day 30 and then receive a payment each month you remained unemployed or incapacitated for up to 12 months. Other providers could offer payments for 24 months but it would only be by checking the terms and conditions of the policy that you would find this out. You also have to read the terms to see when you could claim as there are some policies that state 90 days at least. Also check exclusions as there are some in all payment protection policies, British Insurance adds in just the basic few but others could add in many more and it is essential that you check these against your circumstances to ensure suitability before buying.

Mortgage insurance from specialist standalone provider British Insurance can be taken to suit your circumstances. You could want the protection of accident, sickness and unemployment only but then you might just want to cover against accident and sickness alone or unemployment alone. This will determine how much you pay for your protection as will age and the amount you choose to cover of your monthly mortgage repayment.

Taking out mortgage insurance is a far more reliable plan that considering being able to claim State benefits. Many homeowners are under the impression that if they were to lose their income the State would provide them with the payments for their mortgage each month. However this is usually not so, you might be eligible to claim benefit from the State towards your mortgage repayments but you would have to meet certain criteria. Even if you were eligible the money you would be entitled to receive would only go towards you being able to pay the interest part of the mortgage repayment. Currently you would also have to wait for many months before you would see any benefit and by this time you could already be in arrears. If you relied on being able to meet your mortgage repayments with savings you could also be let down as they might not last.

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The sum of money could make a huge difference when it comes to the balance between losing your home to repossession and keeping it. Mortgage arrears are the worst nightmare of any homeowner who has to maintain repayments over many years because just a couple of months of missed payments and no hope of catching up on them could mean the lender will take you to court. If the judge were to agree with the mortgage lender you would be given an eviction date and have to leave your home so the lender could sell it to get back their money. With mortgage payment protection behind you at least you would have some money to go towards the repayments each month.

If you take your mortgage protection from ethical British Insurance there would be no excess to stand to as British Insurance pay back to the first day your unemployment or from you being incapacitated. You could claim benefit for day 30 and then receive a payment for 12 months which would provide you with plenty of time to search for work or concentrate on making a recovery. However if you looked with other specialists you might be able to take out cover that would last for 24 months but you would have to check out the small print in the policy to discover this. You also have to read the terms to check when you can make a claim as some providers will extend this to at least the 90th day of you being unemployed or incapacitated.

You can take mortgage protection alongside the borrowing with the lender but usually this will be the dearest way of covering your repayments. A standalone provider can save you money on mortgage payment protection and if you choose independent payment protection specialist British Insurance you can save up to 40%. With British Insurance you can take out just the amount of cover you need. You can insure against the possibility of accident, sickness and redundancy in one. However you can also choose just to insure against accident and sickness or just against unemployment only. The type of protection you choose will go towards determining how much you pay for the premiums as will age and the amount of your mortgage repayment you cover. As British Insurance offer premiums based on age this means they provide the younger home buyer with the chance to protect their payments, whereas before high priced protection was out of their reach.

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The money you received back from mortgage protection insurance would then go towards maintaining the repayments of your mortgage and would continue to do so for the term of the policy. You would have to check when you could claim and for how long the protection would last. If you choose ethical leading payment protection provider British Insurance you can claim from day 30 and there would be no excess as they pay back to day one of you becoming unemployed or incapacitated. You would then have 12 months to make a recovery or to find work before the policy would expire. You could find that some providers will offer to provide you with an income for up to 24 months if you check the terms and conditions. You also have to find out how long you would have to be unemployed or incapacitated as with some providers this could be as long as 90 days.

When checking the terms and conditions you should also check what exclusions are included. British Insurance will add in just a few exclusions but other providers could add in many more. It is imperative that you check these against your lifestyle before you take out a policy so you are sure that you would be eligible to claim.

If you should become unemployed or incapacitated and you have not got something to fall back on you would be at risk of losing your home to the lender. Just one missed mortgage repayment would be a worry as you would have to catch up and without an income this could be impossible. While the majority of lenders will try to make an agreement with you to catch up on what you owe, if you are unable to make agreement you will be taken to court. If the judge decides to rule with the lender then you will be given an eviction date and you must leave your home before this time.

Mortgage protection insurance can be a lifeline to cling too if you lose your income and it could make the difference between losing your home and keeping it. If you were to rely on using any savings you have it could be a let down as you might have to take many months away from work to recover and it could also take just as long to find work and savings might deplete. If you apply for State benefits towards your mortgage repayment you would have to be eligible and even then you only get help towards the interest payment of the mortgage and currently have to wait several months.

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You would have to wait for a period of time before the protection could be claimed on and this differs between providers. You then have a certain period of time to find work or recover before payments cease and you need to check this before taking the cover out.

If you look at income payment protection with standalone specialist provider British Insurance you would not only get cover that has the cheapest premiums each month but also one that has just a few exclusions. All payment protection does have exclusions and some providers add in more than others. These have to be checked against your lifestyle so that you can be sure protection would be suitable. Ethical British Insurance gives you the information on their website so you can check before buying.

British Insurance also offer cover that comes with no excess as they will date back the benefit to day one of you falling ill, suffering an accident or becoming unemployed. You can claim after day 30 and you would then have 12 payments, one each month before the policy would stop. When shopping around and comparing premiums you can also check the terms offered by the providers as some providers will continue paying for as long as 24 months. You should also be aware that some will extend the period before claiming and with some providers this could be up to the 90th day of unemployment or incapacity.

The money you received from the protection could be used towards paying any and all outgoings that came into the home each month. This could be anything from putting food on the table to keeping the utility bills paid. You would not have to worry about finding money or juggling bills around which would leave you free to search for a new job if you are unemployed or make a recovery if suffering from accident or illness.

Income payment protection is a better safety net to rely on than risking using your savings and it can also be better than relying on being able to claim benefits from the State. State benefits often do not pay out the income you are used to bringing home and can leave you struggling to continue meeting your essential payments. Savings could also run out well before you have found another job or you have recovered from incapacity as it could take months to get back on track.

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