Payment Protection Insurance or as it's more commonly known 'PPI' was designed to protect you in times of need but did it ever work for you? It's bounced around the news for the past 4 years, with its main problems coming to light over the past 12 months.
The insurance itself was designed and made as a product to protect people in the event that they couldn't pay their loan. It was meant to cover you for most circumstances but it included small print that rejected a lot of claims and the insurance only paid out for around 20% of people who tried to claim on it. That means for 4 in 5 people this insurance would not do what it was designed to do and it's likely to leave people in difficult financial circumstances.
The majority of people that knew about this insurance felt it was required in order to get the loan; a large portion of people were pressured into buying it through a range of sales pitches used by the advisors selling the PPI. But most people found that this insurance was added without their knowledge at all, which means the customer was quoted an overall monthly figure for a 'protected loan' and if they felt it was affordable (or felt it was their only option) they've taken this 'protected loan' out unaware that they are paying approximately 10 - 50 per month on top of the actual loan.
The insurance policies themselves have numerous exclusion clauses (as with most insurance products) that stop these policies paying out (usually when you need it most). One of the exclusion clauses for example is that it will not pay out for anyone with a pre-existing medical condition. The insurance obviously has this clause in it because, if you were to come out of work due to illness or injury, then the insurer could quite easily blame the reason you've come out of work, on the medical condition and they would refuse to pay for your loan.
Overall Payment Protection Insurance hasn't done much good for many people. It has helped a few people, but it's mainly made the banks billions in profit. It's advised that you put in a claim for Payment Protection Insurance before your time runs out!
The insurance itself was designed and made as a product to protect people in the event that they couldn't pay their loan. It was meant to cover you for most circumstances but it included small print that rejected a lot of claims and the insurance only paid out for around 20% of people who tried to claim on it. That means for 4 in 5 people this insurance would not do what it was designed to do and it's likely to leave people in difficult financial circumstances.
The majority of people that knew about this insurance felt it was required in order to get the loan; a large portion of people were pressured into buying it through a range of sales pitches used by the advisors selling the PPI. But most people found that this insurance was added without their knowledge at all, which means the customer was quoted an overall monthly figure for a 'protected loan' and if they felt it was affordable (or felt it was their only option) they've taken this 'protected loan' out unaware that they are paying approximately 10 - 50 per month on top of the actual loan.
The insurance policies themselves have numerous exclusion clauses (as with most insurance products) that stop these policies paying out (usually when you need it most). One of the exclusion clauses for example is that it will not pay out for anyone with a pre-existing medical condition. The insurance obviously has this clause in it because, if you were to come out of work due to illness or injury, then the insurer could quite easily blame the reason you've come out of work, on the medical condition and they would refuse to pay for your loan.
Overall Payment Protection Insurance hasn't done much good for many people. It has helped a few people, but it's mainly made the banks billions in profit. It's advised that you put in a claim for Payment Protection Insurance before your time runs out!
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