Investment Protection Plan

An Investment Protection plan, in short, is a plan devised to protect your investment and purchases. If you want to consider a special case of mortgage, an investment protection plan is nothing but an insurance taken out against all the possible events that are likely to affect your income and other earning levels thereby hindering or stopping you from making the necessary mortgage payments at regular intervals of time. So what are these events? Well these events could be anything like he lots of your job, a major illness due to which you are incompetent to work for a particular period of time, or you suffering from a severe accident which prevents you from working at your workplace forever. Thus, here if you are not able to pay your mortgage on time, the investment protection plan comes to your rescue. It is due to this plan that your mortgage will be covered for a certain period of time. This certain period is generally of length 12 months. Once you have recovered and are ready to make the mortgage payments on your own, the protection from this plan stops.

So how exactly does this investment protection plan work? Well, the working is simple and here it goes. Suppose that you are not able to work for a period of more than 30 days and if you a pension plan ready and you meet the eligibility criteria required to receive coverage from this investment protection plan you should be able to make a claim and have your payments made, usually for up to 12 months. In some cases, which are special, claims can be extended to 24 months. However there is some redundancy insurance associated with this. However there are certain events where this protection plan is of no use. The events are mentioned below and you need to be very careful when dealing with these events.

An investment protection plan is actually a very good insurance cover, but there are certain exceptions to it where it will not apply. In case you are self employed then, for example, redundancy cover that you will receive is a bit different from someone who is in full-time employment and is made to lose his job due to some tragic event.

If you are self-employed, you will have to have stopped working altogether because of the injury, illness or accident itself. You will not be able to cash on to your investment protection plan if you are short of money due to a lull in your business.
Even if you are in full-employment, there are certain events where you will not be able to claim cover from your investment protection plan. For example, voluntary redundancy is not sufficient to claim unemployment benefit. Because this is a choice you have made and not something that happened out of your control, any claim made here is disregarded. If you're still not sure what is and is not covered, check with your insurance advisor. Your advisor will be able to explain payment protection in more detail. Plus he will also help you in searching for the best investment protection plan.