To compensate for the loss in revenue, lenders have to look for other options. A PPI is one of the way by which financial providers try and cover up their loss. A protection plan makes the entire loan plan doubly expensive. But, a protection plan can be beneficial for a lot of reasons. It can help you in times of need when you may not be able to pay back your instalments on time.

However, most consumers do not have sufficient knowledge about the different PPI’s available in the market. Taking a PPI against secured loans makes sense as the loan is to be secured against the borrower’s home. Here are some types of buyer plans that are generally offered to the consumers:

Life assurance policies

This protection policy will pay a lump sum on your behalf in case of the death or upon diagnosis of a terminal illness whereby the applicant will survive for less than 12 months.

The premium amount is based in accordance with the type of loan taken. For example, in case of secured loans with an interest only payment, the total sum is charged accordingly.

Common critical illness covered by PPIs include Blindness, Deafness, Alzheimer's disease, Kidney failure, Cancer, Coma, Heart Attack, Loss of limbs, Paralysis and Stroke (diagnoses must meet the providers definition).

Consumers generally take PPIs against secured loans. Most lenders offer insurance plans to the consumers who ask for it. There is no need for borrowers to hunt around for buyer protection plans. In most cases, lenders return the PPI amount if it has not been used during the loan tenure. However, this offer is subject to lenders credit policies.