PPI comes in many appearances on many products. It may be called loan or credit protection or accident, sickness and unemployment cover but fundamentally, it is sold as an ‘essential insurance’ from the broker or banker.
In the ‘90s many people took out a loan and were offered a policy to protect their payments if they were unable to pay. Customers were told that if they didn’t take out PPI they wouldn’t be able to get the loan, only mentioning in the small print otherwise.
It was often sold aggressively with personal loans and mortgages and credit cards.
PPI is heavily talked about and present in the news a lot lately because of the Financial Services Authority (FSA). The regulator of all providers of financial services in the UK, has ruled since that many of these polices were in fact mis-sold, which means that you could make payment protection claims to get your money back.
It has been reported over 2,500 complaints a week are recorded regarding ppi refunds and consumer watchdogs are urging people not to give up.
Basically, a PPI policy is in which an agreed sum of money is paid out each month to cover the payment due on your mortgage or loan if you are not able to pay.
There are many reasons why you may be unable to do this, such as becoming sick or having an accident and not being able to work, or being made redundant through no fault of your own.
Obviously, all policies have their own terms and conditions; for how long the insurance lasts for, what is actually covered and what isn’t, and how long you will need to carry on making payments.
Often, you will carry on making payments even after your insurance has expired which means you can apply for reclaiming ppi.
Make sure you fully read and understand your payment protection policy before taking it out.
