Standalone providers offer best policies
- 10TH MAY 2007
If you take out a mortgage, credit card, loan or similar borrowing, you will be offered payment protection insurance (PPI). This policy gives you financial protection in the event that you become unable to work due to long term illness, accident or unforeseen redundancy.
Around eight out of every ten payment protection insurance policies are sold by banks and lenders alongside the borrowing, often without the customer realising that it is not a compulsory product.
And, as many reports and industry investigations have proven, consumers are paying well over the odds for the cover.
Standalone providers, such as the ethical and specialist provider British Insurance, generally offer better policy benefits and a much lower price.
In fact, research from British Insurance showed that when comparing the cost of loan protection insurance the cheapest policy is £2.15 with the most expensive being from the Royal Bank of Scotland’s at £25.65*!
And when it comes to mortgage payment protection insurance, it starts at £2.00 per £100 worth of cover for a 30 year old with British Insurance and goes right up to £7.70 from Cheltenham & Gloucester.
Shopping around for cover really is the answer to getting the best deal as well as ensuring that you get a suitable policy. After all, we do it for motor and home insurance, so why not for other insurance too, such as payment protection insurance?
By going to a standalone provider you are under no pressure to buy the standard product offered by the bank or lenders, meaning you have more choice of products. Often, as the press has highlighted, policies sold by these financial organisations are often unsuitable. and there have been many cases of mis-sold policies because of this.
So, when taking out any form of borrowing, don’t just sign on the dotted line when offered payment protection insurance –shop around first. It could save you thousands of pounds over the term of your borrowing.
* Cost per £100 for a 30 year old
