The PPI Claims scandal has dominated the UK news for many years now, but many people are still unsure as to what PPI is.
What Is PPI?
Payment protection insurance is a type of protection that enables consumers to meet payments still - even if they aren't actively employed or are too ill to continue working. It operates by paying out a sum of money to help cover monthly repayment costs on mortgages, credit cards, and bank loans. In most cases, payment protection insurance isn't bought separately but forms part of the terms and conditions of a loan. Before investing in payment protection insurance, consider these factors:
The cost of the insurance over the long term. Even though payment protection insurance can seem affordable, it can quickly add thousands of pounds to the note. For example, larger notes are usually tied with expensive payment protection insurance. Payment protection insurance can be manageable for low tier credit cards, but it can add up to £2000 for a bank note to purchase a piece of property.
What are the factors that will increase premiums? Many companies have mis-sold payment protection insurance, raising premiums for the program while reducing coverage. Check the terms and conditions, and make sure that it explicitly explains under what circumstances premiums may increases.
Payment Protection Insurance Versus Income Protection
Payment protection insurance is designed to protect your ability to pay off monthly payments. Income protection insurance aims to cover your earnings due to the inability to work. This type of insurance works by giving consumers a tax-free proportion of their income – which can then be used to then cover financial costs like credit cards, mortgages, and store cards. The main differences between payment protection insurance and income protection are tenure and coverage. Income protection insurance tends to be a long-term solution, as the policies can help with payments up until retirement age. Payment protection insurance will only pay out for about 12 months, with premiums that can change year-by-year.
Payment protection insurance has been widely mis-sold alongside different types of loans, with many UK residents paying for lackluster or sometimes even absent cover. Many in the sales industry are incentivized to sell payment protection insurance to ensure commissions. Consumers, relying on the trust from esteemed financial institutions, will typically fall for it. This has created a culture where payment protection insurance has been mis-sold and mishandled. The mis-selling of this insurance has been an issue for many decades, with the UK's financial regulators starting to fine payment protection insurance companies in the mid-2000s. If you think that the insurance isn't offering adequate coverage and is charging you too much, then here's how you can complete a payment protection insurance claim:
Familiarize yourself with the insurance policy.
By checking over the plan, you will be able to see how insurance influence payments, the type of coverage that it offers, and when it goes live. A phone call to the bank institution or the lender can typically answer any questions about coverage terms. It is essential that they send some paperwork, as proof will allow claims to be more streamlined without further complication.
Contact the lender and send them a note from theFinancial Ombudsman Service. This is UK's recognized authority when it comes to sorting out any insurance problems. Make sure to include any paperwork to back up your case, keeping copies of any transactions between you and the banking institution.
Once you've received a response to refund your premiums, make sure that you aren't being undercut. You are entitled to compensation. As a banking consumer, are not at fault when products sold by institutions are marketed in such a way that profits take precedence over ethics.
to any newsletter and get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE!