Don’t be conned in to taking payment protection insurance cover
- 26TH MAY 2007
If you are buying a personal loan over the internet or over the telephone, then watch out that loan payment protection insurance isn’t automatically included within your quote.
Recent research carried out by consumer watchdog Which? showed that people could unwittingly buy expensive payment protection insurance (PPI) when taking out a persona; loan.
Which? mystery shopped 41 companies, asking for a loan via the telephone. Staggeringly, 24 out of the 41 calls made automatically included payment protection insurance (PPI) in with the quote for a personal loan.
According to Which? a number of lenders did provide a quote both with and without loan payment protection insurance. However, only one provider didn't include it at all.
Loan or payment protection insurance will continue to make met your monthly loan repayments should you become unable to work due to illness, accident or involuntary redundancy. However, it is often over priced by the major lenders – sometimes as much as 80% compared to the same policy sold by an independent provider such as specialists British Insurance - and is often sold to people who would ineligible to claim such as part-time workers or the retired.
While there is no doubt that it provides invaluable cover, it is not compulsory, yet many consumers are led to believe that they won’t get accepted for the loan unless they agree to take the cover out.
Simon Burgess from British Insurance commented: “More and more people are being duped in to buying outrageously expensive over that is often not suitable for them. Any one taking out a loan should ensure that they get two quotes – one with loan payment protection insurance cover and one without. They can they shop around for the loan protection insurance and compare prices, terms and conditions.”
