Payment protection insurance in a nutshell
- 3RD JUNE 2007
With payment protection insurance (PPI) being firmly in the spotlight due to the mis-selling of high priced policies, confusion over the product is at its highest.
payment protection insurance is taken out on many forms of borrowing, such as mortgages, credit cards and loans. If you should come out of work after committing yourself to credit, then the cover will pay the monthly repayments should you be off work due to prolonged sickness, involuntary unemployment or accident. The majority of policies will pay out a sum of money every month for up to one year (some will pay for up to two years’) which gives you plenty of time to get back on your feet.
However there can be many exclusions within a policy. For example the majority of people think that the cover has to be purchased alongside the credit card, mortgage or loan. This is actually the most expensive way of purchasing the product as the banks and lenders know that they have a captive customer and will endeavour to sell you cover with hugely inflated premiums.
A far better way is to go with an independent, specialist provider such as British Insurance. British Insurance sells quality insurance products and can save you around 80% on your loan payment insurance premiums and 40% on mortgage payment protection insurance.
Simon Burgess, managing director of British Insurance warns it is imperative to read the small print in a policy as there are a wide range of things that stop you from claiming. People believe that their status isn’t affected by the policy until they come to make a claim and find they can’t.
For example, if you are self-employed or retired then you simply would not benefit this type of insurance as you would have a hard time proving a loss of income.
