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Payment Protection Insurance (PPI)What is PPI? PPI is an insurance policy that is typically designed to maintain the repayments on a loan or other form of credit in the event that you fall ill, become unemployed or in the worst case scenario, suffer bereavement. It is generally a sensible idea to have some form of insurance to protect you against these unfortunate eventualities, especially in the current financial climate. The challenge comes in choosing the best and most relevant type of insurance policy from the bewildering array of insurers and products out there. Lenders will try and help you by ‘persuading’ you to take to take out their insurance on the basis that it is the best on the market. The real reason however, is because they get a commission from the Insurers. In many cases, and particularly on secured loans, upto 40% of your insurance premium is shared between the insurer and the lender in the form of commissions. With the premium being anything upto 20% of the value of your loan, the commission payment is a personal loan in its own right! Similarly with unsecured loans and other forms of credit, the insurance premiums can be exorbitant simply because of the lenders greed for the commission income. Mis-selling With these large sums of money being available to lenders in the form of commission, the pressure is really on to sell the insurance. Loan and sales consultants everywhere will have weekly and monthly sales targets and in some organisations even daily ones. The honest loan consultants will try and sell you the insurance in a genuine manner. They will go through a “demands and needs” procedure with you and establish that you do really need the insurance, perhaps for example because you don’t have any existing cover. The less scrupulous loan consultants however, will cut corners and you may actually end up with an insurance policy that you do not actually need, is prohibitively expensive, doesn’t cover the term of your loan and for which you may not actually be eligible for. If you have been a victim of mis-selling and would like to claim against your lender, we can take all the hard work and worry associated with the claims process. Download a claims form, by clicking on the icon below, post it back to us and we will do the rest.
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