Family loan and protection

InsideInsurance

Twiglet001 wrote: »

Income protection or PPI for the loan value I would need to obtain be separately and assuming I have capacity then I could still manage the payments to her. However if anyone knows if PPI can be applied to a loan from a family member I would be interested to know this.

PPI is just a variant of ASU (accident, sickness and unemployment) which in itself can sometimes be sold as "income protection". The slight difference with true PPI to ASU is that it would normally pay the money directly to the finance company rather than you but little else.

The issue with PPI/ASU is that it only covers 12 or 24 months payments and so if you develop a long term illness your on your own after the policy runs out.

There is also the full fat version of Income Protection which is correctly called PHI (Permanent Health Insurance) which only pays out on accident or sickness but will pay out until your 65th birthday (or a date of your choice). So no unemployment cover, but some offer an add on of short term, but much more comprehensive cover on AS.

Life is the other element.

What are your work provisions for sick pay/ life insurance?

Twiglet001

At work I only get an income protection linked to my pension, which I temporarily left because I can't afford it but I intended to return. My thinking was that I could get income protection short term so I can use the additional income from not paying the pension to pay a bit extra for a few months and then go back in. My pension is much higher than I think income protection would be and from indicative quotes the income protection would be cheaper than my credit card interest. However I don't think very short term income protection is possible and so the most sensible solution is to re-enter my pension straight away. Then that leaves the life cover, which I need to understand more and will look into.

I will also explore more options to avoid borrowing from mom. I thought because I can make just over my minimum payments etc and pay my bills that there is no help, but I will explore this first and get more advice from debt charities and I know this is covered in other forums. I also don't want to be out of my pension but perhaps going back in shows the pressure on my finances which could help me negotiate with my credit card company. I would much prefer not to loan the money but I am also tired of walking through mud (which is entirely my fault I know) and I believe I could pay it back in two and half years if I could freeze the interest.

Thanks for the advice, I'll take some time to look at all options and the other forums to try and find the best way forward.

T