Payment protection offers you one thing that money can’t buy – and that’s peace-of-mind. This is what PPI promises to deliver when the creditor brings it up during the process of qualifying for a loan. One might find it intimidating to be offered another insurance on top of the money they are borrowing, so in order to sell the product, the lender will highlight the perks one can get from taking out PPI.
What is Payment Protection Insurance?
PPI, as it is most often called, will stand in to cover payments for a loan when an incident would hinder a debtor from doing so. Accidents, grave illness, unemployment, or even death are some of the reasons that can derail the payment of a borrower. Upon approval of a loan, the creditor often offers to apply payment protection insurance along with the purchase.
These purchases can be credit card, store card purchases of high value, car loans, tuition loans, mortgage, and even health insurance. The add-on, which would be the payment protection insurance, will ensure that the debtor would be able to pay should the situation leave him or her unable to do so. This will also be beneficial to the creditor, as it safeguards the return of the money.
Payment Protection Insurance Misselling
A number of people have been coming out within the past year claiming to have been sold PPI without their consent. Not being given enough knowledge about the insurance had also ensued in dissatisfied customers clamoring to get the money they have paid for, on a service they claim to be unaware of.
How is payment protection insurance been missold to customers? When people are often asked about it, they claim their knowledge of the lending process intimidated them into availing PPI, believing they would not be approved for the loan if they had not signed up for it.
Ignorance of PPI policies is another reason why most people are dissatisfied with the insurance. Upon the representative’s offer, not much information on the policy was given. They expected the representative to have covered grounds regarding the terms and conditions of the loan, so they did not take time to read the fine print found in the contract. This has lead to numerous complaints. Pre-existing medical conditions and mental health problems will also prevent a policyholder from covered by the policy, as well as self employment. These are just some of the things that the representative might have forgotten to mention when the briefing about the PPI occurred.
Other customers complain that the payment for the PPI, when they have agreed to it, was required to be made in one lump sum, thereby adding more strain to their pocket. Since they are undergoing financial hardship, the last thing they want is another financial responsibility. However, scared to say no and be disapproved, they sign up for it.
Claim your money back!
If one feels the need to get the money he had spent on PPI back, he must first check on a few things. Since most people are not aware that they have actually signed up for the policy, they would need to unearth the documents that prove they availed of PPI. Most PPI policies cover a maximum of six years and since institutions are not obliged to keep documentation beyond that span of time, they might have trouble locating yours from their files.
Those with active policies have a greater advantage as they will have documents ready. There are numerous companies who offer claim services and if you wish to go down this route, choose one that is reputable and doesn’t charge upfront fees.