When receiving a large loan, it can be overwhelming to think about its repayment. One thing that is concerning is the fear of the inability to pay back the loan due to unforeseen circumstances. Payment Protection Insurance is available to ease this fear and making a PPI claim may be easier than you think. As defined here, Payment protection insurance (PPI), also known as credit insurance, credit protection insurance, or loan repayment insurance, is an insurance product that enables consumers to insure repayment of credit if the borrower dies, becomes ill or disabled, loses a job, or faces other circumstances that may prevent them from earning income to service the debt.
At first glance, PPI has many positives. The main advantage to holding a policy is that you have a piece of mind. In the event of unemployment or sickness, you are able to maintain payment of your debts. By staying on top of your payments, your credit score will not be affected. PPI also has high acceptance rates. There are few reasons why you would not qualify for a policy. Unlike medical or life insurance, you may not need to worry about age or preexisting medical conditions.
Even though PPI sounds like a good idea, there are some drawbacks. The main problem with these policies are that they are mis-sold. People are being sold policies and are not even aware that they have them. A lot of times they are automatically locked in with mortgages or loans and you are paying for them without knowing. A number of companies of been established to help people to make a ppi claim. There have also been reports of a lot of consumers unhappy about PPI claims being turned down because of exclusion clauses in their policy. This is a form of being mis-sold on the policy as well because people buy into the policy thinking they would be covered for a particular situation and if that situation occurs, they are denied coverage. The coverage also may not be explained in its entirety to the consumer when purchased, and the sum of money provided at payout could only be a percentage of your salary. There are often loop holes in the contracts that people are not aware of.
Overall PPI can be a very helpful tool to keep your family safe at times of crisis. However, it is important to know what you are signing up for and to do your research before committing to a policy