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Some cover stories are simply myths

At a time when the threat of unemployment is hanging over many consumers, it is important that some widely held views on income protection and unemployment are exposed as myths.

Some say the only way to buy unemployment cover is to purchase a payment protection policy when the reality is that this can be bought on its own or in addition to other types of protection policies such as life cover, critical illness or income protection.

It does not have to be purchased as part of a PPI or an accident, sickness and unemployment policy.

If you Google ‘unemployment cover’, several companies make the point that this type of cover is either only available as PPI or is not available with full IP. While this might be good marketing it’s a myth and therefore misleading.

Another view is that such cover is always cheaper than IP. For many consumers – especially the young and healthy first and second-time buyers who typically buy PPI – this is not the case.

With or without unemployment cover, IP tends to cost around the same or even less while providing significantly enhanced cover.

PPI has a place in the marketplace and some of the products available provide decent value for money for consumers who can’t afford or obtain anything better.

But unemployment cover from traditional protection providers can be more flexible in terms of benefit and waiting periods than many standard ‘one price fits all’ policies.

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