What is PPI?
Payment Protection Insurance (PPI) was designed to ensure you could keep up your monthly repayments on debts like loans,
credit cards or mortgages if you were unable to work due to an accident, sickness or unemployment (redundancy).
It's also known as Repayment Protection Insurance (RPI), Accident, Sickness and Unemployment Cover (ASU) and by many other names.
Most people were offered a PPI policy when they took out the money loan, credit card, mortgage, store cards or finance for a car.
This practice changed in April 2006 so that most firms could no longer sell you PPI as part of the debt.
When you took out a loan or credit you were under no obligation to insure the repayments in the event that you were unable to keep paying.
This means that PPI was not compulsory a fact which many advisers and sales agents did not make you aware of.
How does PPI protect my Payments?
The benefits payable from PPI vary between each lender and insurance company but generally they pay your monthly commitments - loan or mortgage - for a defined period, normally up to 12 months.
Store cards and credit cards varied in that they would normally pay a percentage of your outstanding debt when you made the claim each month for up to 12 months.
In both cases when your period of cover ran out you would have to continue to make the repayments even although you may not have returned to work.
Many PPI policies also included some life cover element, which in most cases, but not all, repaid the full outstanding balance when you died.
What Should I Have Known Before I Bought PPI?
There were dozens of different PPI policies sold and these varied in many ways including;
- The cost of the policy
- If you were already covered in an existing policy
- The limitations of the policy cover
- Was there a 'waiting period' before you could actually claim? i.e. off work sick for at least 30 days before you could claim?
- What exactly did the policy cover? (back pain and stress were not commonly covered)
- Did it cover any pre-existing illnesses or persistent illness?
There were many different forms of protection available to you, but you were probably not told this at the time and recommended PPI.
If this is the case then do not hesitate to start a claim. Enter your details in the box provided and we will contact you shortly.