PPI (Payment Protection Insurance) is the policy meant for covering your financial obligations in situations when you have to take involuntary unemployment. This happens when you are sick or had met with an accident, and you couldn’t earn because of that. It is also referred as temporarily disabled situations. The policy will take care of you by providing enough money during such cases, as per the amount paid by you month-wise or yearly. There are banks and certain insurance agents which offer these payment protection insurance policies. Certain credit card companies also provide the PPI policy.
The policy is offered generally on either of the two types: Monthly Premium basis or Single Premium. The monthly premiums are paid on a monthly basis and can be cancelled at any time. The interest is not added to the monthly payment, while it is being cancelled. The single premiums are paid in every 30 or 60 months and hence cannot be cancelled in between. After paying the amount for this 30 or 60 months period, the money is directed to the main loan.
But there are a lot of people suffering on taking these PPI policies. The media also brings out several drawbacks and negative feedbacks on PPI. This is due to the PPI providers, who don’t include a proper terms and conditions in the policy. Their main intention lies in selling the PPI policy, rather than helping people that way. The lenders don’t even consider whether the policy benefits the person in any way. PPI also comes in different forms. People must be aware of certain conditions the banks and agencies follow. Lenders mention that, in order to provide a housing or educational loan, a person must sign a PPI policy they provide.
Even there are people who don’t know that they have bought it. The banks or credit card companies may call it as a loan, or credit protection, or accident, sickness and unemployment cover. They would have mentioned about the policy somewhere in a small print, which could generally have not been noticed by some people. By getting it signed, they make you a member of their PPI policy.
As a result, people go for PPI Claims to get their compensation. One could claim for compensation, if he has got the proper documents, even if the policy has expired. If the policy has been mis sold, then one could go for PPI Reclaims. It has been estimated that, there are three million people waiting for compensation, after taking a PPI policy. Financial Services Authority of UK has issued certain rules and conditions to handle the miss selling of PPI policies by banks.