Already on ArticleSlash?

Forgot your password? Sign Up

What is Payment Protection Insurance (PPI)?


Visitors: 197
 1 vote


Payment Protection Insurance, commonly abbreviated as PPI, is an insurance coverage package, meant to cover outstanding loans, overdrafts and other forms of debt. This insurance cover is usually an add-on product that is included in the final computation of overdrafts and loans. The primary purpose of this product is to protect the borrower, from circumstances that are beyond their control, which may prevent them from servicing their debt. Such circumstances include loss of employment, ailments, accidents, or death.

The Controversy Surrounding Payment Protection Insurance Claims

Statistics show that PPI has the largest number of rejected claims, more than any other insurance product. This is largely, due to the way that this product is sold to consumers. First, due to the nature of this insurance product, being an add-on product, most consumers are unaware that they have purchased insurance coverage. In addition, since underwriting is done at the time the product is being sold, it becomes rather difficult for consumers to assess, whether the policy is necessary, considering their circumstances at the time of purchase.

This is why the payment protection insurance has been a subject of controversy, with consumers alleging that their policies were cases of PPI mis-sold. The Financial Services Authority, the Office of Fair Trading, and The Citizens Advice Bureau, are some of the agencies that have in the past, voiced similar concerns, thus encouraging consumers to start making PPI claims.

How PPI Was Mis-sold

An in-depth look at how the policy was being sold to consumers, unearthed the dirty techniques that were being used, by unscrupulous lenders, to either trick, or force borrowers to purchase the insurance cover. Some of these techniques include:

• Openly misleading borrowers into believing that by accepting the insurance policy, they stood a better chance of accessing credit.
• Surreptitiously, attaching the PPI to loans, without informing the concerned borrowers. Since the consumers are unaware, they are unable to make Payment Protection Insurance claims.
• Selling insurance to ineligible candidates, for instance, to people who are already unemployed or retired, hence do not require coverage against loss of employment. Such people cannot therefore, lodge payment protection claims.
• Pressurizing consumers, to force them to purchase the policy.
• Failing to give a full disclosure to consumers, concerning the terms and conditions of the insurance policy, exemptions and breakdown of costs.

Is PPI been mis-sold to you, then you can claim it back. Guardian PPI Claims helps you claim back you payment protection insurance. Payment Protection Insurance Claims , PPI refund , PPI Claims .


Article Source:

Rate this Article: 
Where To Go For The Cheapest UK Mortgage Payment Protection Insurance
Rated 5.0 / 5
based on 1 vote

Related Articles:

PPI Or Payment Protection Insurance As it is Known

by: Simon Lance Burgess (July 09, 2008) 

Must I Have a Payment Protection Insurance?

by: Nick Jett (March 09, 2010) 

Why You Should Consider Income Payment Protection Insurance

by: Simon Lance Burgess (June 18, 2008) 

All About Income Payment Protection Insurance

by: Simon Lance Burgess (July 14, 2008) 

Understanding Payment Protection Insurance

by: Simon Lance Burgess (July 13, 2007) 

What is Income Payment Protection Insurance?

by: Simon Lance Burgess (June 19, 2008) 

Consider Loan Payment Protection Insurance

by: Simon Lance Burgess (August 25, 2008) 

Secured Loans- How Does Payment Protection Insurance Help?

by: Angelo D (April 18, 2007) 

Income Protection and Mortgage Payment Insurance

by: Simon Lance Burgess (July 09, 2008) 

Where To Go For The Cheapest UK Mortgage Payment Protection Insurance

by: Simon Lance Burgess (July 13, 2007)