PPI Insurance

PPI Reclaiming Guide

£1,000s for missold PPI insurance – PPI Insurance

Frequently Asked Questions about Payment Protection PPI Insurance

Payment Protection PPI Insurance is also known as PPI, Loan protection insurance, Loan repayment insurance and Credit protection insurance. PPI is designed to cover an unpaid debt, typically in the form of an overdraft or loan in cases of involuntary redundancy of the borrower. Banks and other credit providers sell it as an add-on to the debt.

What are the different types of PPI Insurance?

Many financial products fall under the stable of PPI insurance. The different labels simply reflect the different purposes to which the individual products are suited.

1. Mortgage payment protection insurance will provide a monthly benefit to an incapacitated person to ensure mortgage payments can be sustained
2. Loan payment protection insurance will meet the repayments on any other type of loan
3. Income payment protection insurance will supply a monthly replacement income to help meet any ongoing pecuniary obligations.

Why may you need PPI?

In life you can never tell what awaits in the future. We may face circumstances that may stop us from working and earning a wage. PPI covers the borrower against sickness, unemployment, accident or death, which might stop us from paying off the debt. Payment protection insurance helps you get a tax free payment towards your monthly repayments, easing out the financial stress. Please note that pay-out limits are, however, applicable.

For some, government assistance is offered only for a short period after you become unemployed or disabled. Assistance or benefits would generally cover only the interest payment and not the capital repayments. If the mortgage is higher than a certain amount, you may not get any help at all.

In some instances, payment protection Insurance (PPI) can help. PPI cover usually starts a month or two after you take out the loan and lasts for a finite period. After that the borrower must arrange for other means of repaying the loan. However, the period covered is typically long enough for most people to start earning wages again to service the loan.

Who should obtain PPI?

The difference from Payment Protection Insurance (PPI) has from other types of insurance, such home insurance, is that it is not simple to determine whether it is the right choice for a person. You must take into consideration if you have any other insurance, like sick-pay or death-in-service benefit that already covers you.

What is the cost you are likely to incur?

The price of PPI can vary significantly. The premiums may be charged every month or the premium may be clubbed to the loan amount up-front – the “Single Premium Policy” approach. The latter increases the effective cost of the total policy because the money loaned from the lender to pay for PPI incurs extra interest, usually at the same APR as the original amount borrowed.

The method of calculating Payment protection insurance on credit cards is different, because at the outset there is no outstanding balance and it is not known if the customer will use their card at all. If the credit facility is utilised and the full installment is not paid every month, a customer will be charged as the premium for the PPI a certain percentage of their existing card balance on a monthly basis.

If you’re not sure what do to next – get in touch with us. We should be able to sort out which company is involved and pursue then for compensation.

• 'No Win - No Fee' Service and No Upfront Fees
• Expert friendly advice
• We will handle your case from start to finish.

 

It is certainly worth shopping around to see if you can find cheaper PPI policies. Some stand alone PPI providers are drastically cheaper that banks who sell PPI with the borrowings.

There has been such controversy in the PPI market over the last few years that wanting to change PPI providers have become increasingly common. PPI has been widely mis-sold, with this mis-selling being carried out by not only the banks or providers but also by third party brokers.

If you want to change PPI provider it should be OK. Please note that some lenders allow you to cancel the PPI while keeping the loan, credit card or store card. Several high-profile companies have now been fined by the Financial Services Authority for the widespread mis-selling of Payment Protection Insurance (PPI). This means it's possible to switch PPI to a standalone provider without changing the loan because the lenders do not want any complaints.

Many members of the public have become wary of the PPI sector because they have read the horror stories about missold PPI policies. Many members of the public have made enquires to change PPI provider. Some lenders have been fine but the more common scenario is lenders are not making the process of PPI policy change simple.

Tips on the process to change PPI provider.

1. Be prepared for long delays about when asking for PPI comparisons, quotes and providers.
2. Be prepared to deal with customer service advisors who fail to understand the issues about PPI.
3. Understand that many banks and lenders don’t know how to deal with PPI cancellations. You therefore get passed around from pillar to post.
4. Understand that many banks and lenders don’t know how to separate PPI amount from the borrowed amount. They therefore take weeks to come back to you.
5. Be patient with the lenders as  the PPI providers are currently making the move towards a more flexible policies.
6. Check the terms and conditions of the PPI policy. Try to understand every bit of the agreement.
7. Don’t attempt to change PPI provider if the PPI terms and conditions state that the policy is void if there is the likelihood of redundancy or pre-existing conditions at the time they are taken out.
8. Please do not attempt to change PPI provider if the amount of rebate is not pro rata but instead will depend on the length of the amount borrowed and the period of time that has passed when PPI policy cancellation request was made.

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