For many of us availing a loan is the first step towards making our dreams a reality. However, life can sometimes be very unpredictable and there may be events that are beyond our control. In such circumstances how does one stop their loans from becoming a huge burden on them? Modern insurance systems have an answer in the form of Payment Protection Insurance. Payment protection insurance, also known as credit protection insurance or loan repayment insurance is a type of insurance that provides cover for repayment of a loan in the circumstance of any event that may prevent the consumer from earning income to service a debt.
PPI is the solution in the case of events such as death of the borrower, illness or disability or loss of jobs can be extremely burdensome. Usually offered by most banks and credit providers as an ad-on to a loan or an overdraft product, PPI policies pay out a monthly tax-free sum should the borrower be unable to work for some reason in order to cover, in full or part, all credit commitments such as mortgages, loan or credit card payments et cetera. Some PPI policies also include coverage of living expenses too. While payment protection insurance is an invaluable product, there is a lot of negative coverage in the media for PPI. There have also been reports of several consumers being sold PPIs that are often too expensive and unsuitable for them.
Firstly, it is not compulsory to buy a PPI policy to avail a loan or mortgage or credit of any other type. Since this is a product that is sold alongside these does not mean that you have to buy it. Secondly, be aware of the case of companies that offer cheap loans if you take out their PPI policy. While the loan may come at a cheaper rate than normal, the premiums of the PPI may burn a hole in your pocket.
In case you decide that you need a PPI of some sort, go look around for the right deal for you and compare it to the ones offered by your bank or credit company. It also helps to consider independent, standalone providers for more choice. Finally, carefully check the terms and conditions of the policy to understand what the policy does and doesn’t cover.
However, if you have been one of those who did not consider all of these while choosing and have been mis-sold a Payment Protection Policy, you should not hesitate to fill out a claim.
The PPI, although extremely useful, was marketed in unethical way by several companies. You are eligible for claiming your PPI if you have paid for a claim you don’t even need or coerced into coverage even when you were ineligible. You may even have been sold a PPI on misleading terms and conditions of coverage or even denied coverage in the event of illness or loss of job.
As a consumer who has been misled into buying something you do not need, you can fill out a claim on your own and send it to the company by yourself. However, if you do not have the time for it or you have paid for a policy that has higher coverage and a lot of details; you may alternatively hire a claims company to handle it for you. Several consumers have found it helpful to use online claims tools such as http://www.freeppicalculator.co.uk to help with their claims process and have successfully claimed back what they deserved.