The basics of payment protection insurance
- 23RD JUNE 2007
There has been much confusion surrounding payment protection insurance in recent months and the mounting speculation that has seemingly taken over from the truth has only served to add to that.
Although the Financial Services Authority into payment protection insurance has served to peak British curiosity, it has also lead to a number of individuals being misinformed about the insurance, which was as far away from its original aim as you could get!
There are many falsehoods floating around, including an apparent fact that a lending company or bank could actually refuse you credit if you do not have payment protection insurance. Whilst banks cannot insist on this as it would not come under the FSA’s motto of treating customers fairly, many do try. Payment protection insurance can make huge profits for banks and lenders and these organisations will do as much as they can to sell the product.
Similarly, payment protection insurance has a specific niche market out there and is not suitable for everyone. The retired, part time and students in society would never be eligible to claim. Simon Burgess from ethical payment protection insurance specialists British Insurance points out that: “If you are retired or work less than 16 hours a week you will never be able to successfully claim… because these circumstances breach the eligibility conditions for cover.”
If you do fall into the above categories then you should seek a refund. Payment protection insurance is aimed at individuals working full time, or above 16 hours a week. There are numerous other exclusions too so you should fully investigate a policy before putting pen to paper. You never know what nasty exclusions lurk below the surface!
