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Payment Protection Insurance Guide
Payment protection insurance, sometimes abbreviated as PPI, is a type of insurance that is sold in connection with loans, mortgages and credit cards. The purpose of this type of insurance is to protect the borrower in case they are unable to work due to accident, sickness or unemployment.
The cost of payment protection insurance varies widely. The most expensive type of policy is a single premium policy which is sold alongside loans although due to criticism of the way this type of policy was sold, many lenders are no longer selling this type of policy alongside loans. Single premium PPI is added to the cost of the loan and interest is added on top of this, meaning that it is effectively a loan in itself.
A cheaper alternative is to purchase stand alone PPI. Here you pay one regular premium on a monthly basis. The amount you pay is based on the amount you borrow. Generally speaking, it is a lot cheaper to purchase this type of policy than it is to accept the recommendation of your lender.
You need to decide whether you need PPI. If you have a full time job and you do not have any savings to rely on should you find yourself out of work, then it is something that is definitely worth considering. Before you make a purchase, ensure that you do not already have existing cover and check the policy terms and conditions. The latter is especially important because there may be exclusion clauses which would prevent you from making a claim on the policy.
Many policies, especially single premium policies, were wrongly sold to consumers because the full facts of the policy were not properly disclosed and suitability not properly assessed. If you already have a payment protection plan and would like to find out if you could be entitled to reclaim these premiums, it could be worth contacting a claims company who deal with PPI claims on behalf of consumers. The amount that can be reclaimed depends on how long you have had the policy, but compensation payouts can be quite considerable, so it’s worth checking to see if you make a claim. |
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| Home Contents Insurance |
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| When
it comes to household insurance, there are two kinds of
policy.
* Buildings insurance covers the structure of the home
itself, as well as the fixtures and fittings
* Contents insurance covers the contents you would take
if you moved.
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