Payment protection insurance explained
- 23RD MAY 2007
Payment protection insurance has been in the news an awful lot recently and has also been splashed all over the financial pages as a result of its ability to make serious money for banks whilst ripping off consumers. However, the main problem lies behind the fact that too many people do not know the ins and outs of the average policy.
Payment protection insurance is in fact a private insurance that will cover the outstanding loan and credit card payments that any individual borrower has in the event of unforeseen circumstances that will render him or her unable to make those repayments. There are usually terms and conditions that specify a certain qualifying period and also the term of the pay out, which tends to be around a year.
Individual policies are sold alongside credit cards and loan by high street providers but will only cover that one particular debt and thus one person may have four or five policies to offer comprehensive cover. However, the payment protection insurance policies offered by these lenders have attracted the Financial Services Authority’s attention for unfair practices. One of the main complaints has been of mis-selling to individuals that could never claim.
However, there is an alternative to the payment protection insurance offered by high street banks and lenders. There are a number of companies that now offer standalone policies, of which the ethical British Insurance is just one.
British Insurance can offer comprehensive cover for all of your debts in one policy, which will cost you around 80% less than one individual policy. Anyone valuing their finances in any way will see that investigating this possibility may actually make sense.
