According to data from some reliable source, nearly ten million citizens in the country are facing hardship in coping with the rising unsecured credit card bills. So, quite naturally, debt-ridden individuals are getting telephone calls from the creditors and the collection agencies. But, it is seen that many of you just completely ignore these calls. However, this is indeed a very serious issue and the debtors should not ignore this. The creditors have the power to take you to the court and seek judgment against you. If the judgment goes against you, that I what actually happens in majority of the cases, the creditors have the right to take hold of your assets and even can garnish your paycheck. However, this is indeed a dreadful situation that you would like to be into. The better ways are to enroll into a debt relief programs. These programs help you get out of debt and gradually achieve financial freedom.

The get out of debt calculator helps you in your efforts to eliminate your debts. A wide variety of online debt calculators are available at the market place. This helps you to find out your most suitable debt reduction strategy. Here you have to insert information on your credit card balance, interest rate charged by the credit card company and the minimum monthly payment that you are required to make. Insert the same information for all the credit cards that you hold. The next step is to choose a plan. If you are willing to consolidate all your credit card debts into single monthly payment, i.e., if you opt for debt consolidation program, the debt calculator will provide you information about your minimum monthly payment and the time that will be required to become debt free. Again, if you are willing to make more than the minimum monthly payment, you will get to know the time that will be required to pay off all your outstanding debts. Doing this exercise, you will be able to know how much you will have to shell out every month so as to become debt free. In other words, get out of debt calculator helps you take the right debt reduction strategy in order to eliminate your debts.

However, when you are undergoing debt reduction strategy, you need to follow certain financial restraints. First of all, you have to minimize the number of credit cards that you hold and have to use the credit card judiciously. You need to curb all your unnecessary expenses as well as to plan a budget so as to complement the debt reduction strategy that you are pursuing.

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PPI is seriously discussed and present in the news a lot lately because of the Financial Services Authority (FSA). The regulator coming from all providers of financial providers in the UK, has ruled because that many of these policies were in fact mis-sold, meaning you could potentially make payment protection claims to get your money back. It’s been reported over 2,500 issues a week are recorded regarding ppi refunds and consumer watchdogs are recommending people to not quit. Basically, a PPI policy is in which an agreed amount of cash is paid out each month to cover the repayment due on your mortgage or loan if you’re unable to paying.

There are many reasons why you could be struggling to do that, for instance becoming sick or having an accident and never being able to work, or being made redundant via no fault of your own. Obviously, all policies have their own terms and conditions; for how long the insurance can last for, what is really covered and what isn’t, and just how long you need to carry on making payments. Often, you’ll keep on making payments even after your insurance has run out. Ensure you fully read and understand your payment protection policy before taking it out.

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Before deciding whether income protection may be a good option for you, you may want to think about any alternatives that you may have. You may have other ways that might be able to help you financially if your salary stopped because of accident, illness or unemployment.

So, for example, you may have some employer benefits in place because of your work contract. You may qualify for help from the state or you may have some savings. It may, however, be worth thinking about whether these might be enough to meet your financial needs. For example:

• employer benefits may not last for that long and if you are unable to work because you find it hard to get another job or are too sick to get one, then it may be worth checking how long they would last for and how much you might be paid;
• state benefits may not give you enough money to live on and you may need to check if you might qualify for help with your mortgage and whether this might help you manage your commitments enough;
• savings may last for a while but you may want to check how long you might be able to live on them without your income.

Some consumers may feel quite secure once they’ve thought about this but, for many, what they have in place may not be enough to cover their mortgage, debts and everyday financial outgoings. Of course, many others may not have any back-ups to call on at all. It may, in those cases, be worth thinking about income protection and how it may be able to help.

The basic principle with this kind of cover is that you are making moves to replace a significant proportion of your salary if you no longer have it because of:

• accident;
• illness;
• job loss.

There are three primary options that you may want to consider. These are:

• long term protection for instances of accident or illness;
• short term protection for instances of accident, illness or unemployment (sometimes known as payment protection insurance or PPI, or accident sickness and unemployment insurance – ASU);
• Joint cover that includes both short term and long term policies.

These kinds of insurance policies are designed to help you cope with the loss of a salary by paying a percentage of it to you to help cushion the blow. A long term policy may, for example, be set up to help you cope with a major illness or accident and you may be given benefits until you are back on your feet again or you retire (or until the policy ends). A short term policy does much the same thing but for a shorter period of time and also includes issues with job loss.

Being able to meet your financial commitments in these difficult times may be extremely useful and putting an income protection policy in place may just give you and your family one less thing to worry about.

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• accident;
• illness;
• unemployment.

There are three main ways you may use income insurance to get protection in this way. These are:

• long term income policies;
• short term income policies (often known as ASU – accident sickness and unemployment insurance);
• a joint short term and long term income policy.

This kind of insurance works out to be useful for many people. You may not be able to assess if you may ever be made redundant or get sick/have an accident that prevents you from working. In these cases you may well find that your income stops and that you have no significant money coming in.

What might this kind of insurance do for you in these cases? Let’s take a look:

• long term income cover may protect you against being unable to earn your salary because of accident or sickness. This option may pay you a proportion of your regular income for an indefinite period until you are able to get a new job, reach retirement age or die. It may, also, be set up to stop once the term of your policy ends;
• short term income cover may protect you for shorter periods of time. This kind of policy may cover accident, sickness and unemployment. The aim with this option is to give shorter term benefits in situations where you may be able to get back on your feet sooner. So, it may be set up to last for 6 to 12 months, for example. This kind of policy may also come with some useful additional benefits such as advice and help on how to find a new job and get back to work;
• a joint policy basically brings together the two types of income protection to give a complete protection picture. This may be useful if you have no access to sickness, accident and/or employer benefits at work and you are thinking about getting cover on a more immediate plus a longer term basis.

In general terms you may find, as many do, that this product may offer peace of mind and help to protect you financially. If you have a lot of large financial commitments then you may be wise to think ahead and to work out what might happen if you were no longer able to earn your salary, either in the short or long term. Things you may want to consider include:

• how you may be able to manage your mortgage;
• how you might cope with other debt repayment commitments;
• how much you might need for your day to day living costs for both you and your family.

It may well be that income cover may be able to help you with these costs if you do lose your job through redundancy or find yourself unable to work for a while because of illness or an accident.

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Like many others you probably find that things are OK to fine as long as you are earning. You may even have been quite sensible about your financial commitments over the years and you may have stashed away some savings to back you up if things go wrong. But, have you thought about how you might manage financially if you lost your income suddenly?

Long term income cover is a form of insurance product that may be useful in certain situations (such as those caused by accidents or illnesses) where your salary may suddenly stop. These policies are set up to help you cope financially by paying you a replacement income. A short term policy works in the same way for a shorter time and also covers job loss.

So, for example, these kinds of policy may help you carry on meeting your financial commitments and your day to day living expenses. Let’s look at how they work:

• short term income cover lasts for between 6-12 months and may be used if you cannot work through illness, accident or unemployment. During this period you may be given a range of benefits to help you manage your money including a percentage income payment and advice on how to get back to work as soon as you are able;
• long term income cover works in a very similar way but is designed to cover longer term issues that you may experience through illness or accident. You may be able to set up this policy to last until you retire, go back to work, die or until the policy itself comes to an end.

You may think that you may not need this kind of protection because you have a work related income replacement benefit. It’s great if you do have this, of course, but you may need to check to see how this works before deciding that it may be better than setting up a long term income policy of your own.

You may find, for example, that your employer does have some benefits but that they may not last for long enough for you to be comfortable. If that is the case then you may want to follow the example of other people who then go on to set up a long term income policy that is set up to kick in when their employer benefits stop.

If you aren’t lucky enough to have employer benefits then taking out your own long term income cover policy may be something you want to consider. State benefits may see you given an extreme drop in income and, although you may qualify for some help with your mortgage costs, this may not be enough to keep the wolf from the door.

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Let’s look at what you may get cover for with long term income protection cover and how not having this cover may affect you. For example, how might you cope financially if you:

• became so ill that you were unable to work for a period of time;
• had an accident that meant that you couldn’t work for the short to long term?

If losing your job also worries you then you may also consider short term income protection insurance which is designed to cover against illness, accident and job loss.

You may not be likely to get any warning at all when these things happen. For most people they come out of the blue and leave them no time to prepare. This may hit you hard in the pocket, leaving you without your regular income. This may make it hard to:

• meet your mortgage repayment commitments;
• service any debts you may have;
• cope with your everyday living costs.

Even if you have savings in place and qualify to receive employer or state benefits these may not give you enough cash to pay for everything you need. Your savings and employer benefits may also not last long enough to allow you to manage for as long as you may need to.

Taking on long term income protection cover or an alternative short term policy may be worth looking at in these instances. With a long term policy you may, for example, typically be offered:

• a percentage of your income as replacement to keep you going until you die, get another job, retire or until your policy ends;
• cover for illness or accident;
• the chance to defer the start of payment (which may make your policy cheaper) if you may have employer benefits for a shorter period to start with;
• back to day one cover if you need it.

Short term income protection, on the other hand, may offer you:

• cover of a percentage of your income for a shorter period to allow you breathing space until you get back on your feet again;
• cover for illness, accident or unemployment;
• help and advice that may make it easier for you to get back to work.

Although you may take out either of these policies, you may also be allowed to take them out in tandem. So, if you want both short term and long term income protection cover then you may be able to arrange for both policies to be set up at the same time to give more complete cover. In any case, these may well be options worth looking at, especially for those with significant financial commitments that they may find hard to meet with no salary coming in.

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Let’s say, for example, that you find yourself unable to work. You may find that a long term income insurance solution may help protect you if you:

• have an accident;
• fall ill.

A short term product, on the other hand, may help you if you:

• cannot work through sickness or accident;
• are made redundant.

These kinds of problems may cause major financial headaches. Even if you have some form of employer led income protection this may not last for long and, if you don’t, then you may find the fact that you aren’t able to earn money may cause a lot of problems.

Long term income protection insurance is designed to help people who are unable to earn because of accident or illness. Short term protection adds job loss to the mix. Like any other insurance products they are set up to give protection in case the worst comes to the worst by helping you replace enough of your income to keep managing financially until you are working again or your income is no longer an issue.

There are two main types of insurance you may be offered in this sector. These are:

• long term income protection that helps you cope if you are unable to work because of illness or accident. These kinds of policies may be set up to pay a percentage of your income for the long haul. So, for example, you may be able to claim a replacement income until you are able to work again, until you reach retirement age or until your policy comes to a close;
• short term income protection that is designed to offer a similar solution but for a shorter time. This kind of policy, once again, covers illness and accident but also adds unemployment to the mix. The point to this product is to give cover for the short period that you are likely to need financial help before you get better and are able to work again or find another job.

In some cases you may also be able to take out both kinds of policy at the same time to give complete protection for both the short and the long term. Deciding which option to choose may be tricky and many prefer to go with a comprehensive solution.

Things may happen in life that we just cannot predict. You may not be able to safely say that you will always be in the best of health or that you won’t have an accident that prevents you from working at some point. Knowing how secure your job may be in the future may also be hard. The problems that come with sickness, illness or job loss may, however, put many people into severe financial difficulties. If you have no income coming in then any benefits that you may qualify to get from the state may not be enough to pay your mortgage and your living costs in the same way that a long term income protection or short term solution may do.

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