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Payment protection insurance (PPI), also known as credit insurance, or loan repayment insurance, is an insurance product which enables the consumers to ensure repayment of loans in case of some contingency with the borrower like if they die, contract some kind of illness, becomes disabled, loses their job, or faces other circumstances that may prevent them from earning income to repay the debt. This ensures the circulation of money. Although the policy is purchased by the consumer/borrower, the benefit paid in the event of a claim goes to the company that extended credit to the consumer. PPI usually covers minimum loan payments for a predetermined period (typically 12 months). After this point the borrower must find other means to repay the debt, though this period covered by insurance is considered to be long enough for most people to start working again and earn enough to pay their debt. PPI is widely sold by banks and other credit providers as an add-on to the loan or overdraft product. Most of the time, people don’t even know why they have this insurance connected with their ppi claim. And worse, some people didn’t even know they had it. Making PPI claims is not just about claiming back what the borrower has paid; it also means claiming interest charges. If the loan has already been paid, then it is simply claiming everything back plus statutory interest. If the loan is still being repaid, theborrower would be advised that any settlement that would reflect the future costs of the PPI and all interest charges are written off. If the borrower at the time of the PPI claim owes money to the lender, the lender will usually have a contractual right to offset any PPI refund against the debt. If there is any PPI value left over, then the balance will be repaid to the client. PPI is considered to mis-sold when: • The borrower was not informed that PPI cover is optional • Theborrower was self employed or retired • The borrower not being informed by the adviser about any or all exclusions like any pre-existing medical state which would not be covered under the policy • In the case of Single Premium PPI, borrower will have to pay the interest for whole sum of the loan and the insurance cost which would be added to it. • PPI cover expires much before the complete payment of the loan. • The adviser should provide the borrower with a written statement stating the suitability of it for him Some Facts about PPI Claims: 1. Financial Ombudsman Service is the government run agency responsible for solving all the financial problems that might arise between the customers and financial business providers. 2. If the PPI purchased by the customer is found to be mis sold ppi within the time period, then the customer has the right to make a PPI claim 3. If the customer feels that he has been mis-sold then he can pursue a claim either personally or through a representative, the consumer has the right to appoint a representative on his behalf. 4. The consumer can go in for a PPI claim on multiple loans
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mis sold ppi, ppi claim, ppi claims,
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