How do deferrals and missed payments impact Payment Protection coverage?

Modified on Fri, 14 Jun at 9:32 AM

Having payment protection coverage for your loan can provide invaluable peace of mind. However, it's essential to understand the terms and conditions of your coverage to ensure you're adequately protected. One crucial aspect to be aware of is automatic cancellations of payment protection coverage.

1. Late or Missed Payments: If a borrower becomes more than 31 days late on their payment, payment protection coverage will be automatically canceled. This means that if you fall behind on your loan payments, you will lose the protection offered by the payment protection plan.

2. Deferred Payments: If deferred payments are not paid on time, payment protection coverage will also be automatically canceled. Deferred payments offer temporary relief for our borrowers facing financial difficulties, but it's essential to remember that failing to make these payments promptly can result in the loss of payment protection coverage. Payment deferrals can only be done once every 12 months.

For more information on how to make a missed payment please refer to the following article from our help centre: What happens if I miss a payment?

What happens when my payment protection coverage is canceled?

When payment protection coverage is automatically canceled, borrowers will no longer be eligible to file a claim should they encounter financial hardships in the future. This means that if an unforeseen event occurs, such as involuntary unemployment, disability, or critical illness, borrowers will not have the safety net of payment protection coverage to fall back on.

How can I protect my coverage?

To ensure that your payment protection coverage remains active, it's crucial to stay up to date with your loan payments and adhere to any deferred payment schedules. By making payments on time and making sure your payment deferrals are paid on the due date, you can maintain the security provided by your payment protection coverage.

If you have any other questions or concerns about your payment protection coverage, please don't hesitate to contact our customer support team. We're here to help!