Loan Protection Insurance Cover Providers Are Still Mis-Selling
by: Simon Burgess
In 2005 the Office of Fair Trading received a super complaint from the Citizens’ Advice Bureau. This sparked a huge investigation into the payment protection insurance (PPI) sector, which resulted in several firms receiving fines for not putting the consumer ahead of profits. In some cases, it was found that loan protection insurance cover bought alongside the borrowing had almost doubled the cost of the loan. Since the investigation began into the sector, companies found guilty of mis-selling have had to pay more than £1 million in fines. The majority of those companies fined were high street names that were failing to give out adequate information relating to the cover so that the consumer could make the choice of suitability. Following this complaint, guidelines were laid out to improve sales techniques. To further improve the situation, in March 2008 the Financial Services Authority will reveal its comparison tables, which will cover the three types of protection: loan, mortgage and income. The tables will hopefully put an end to the confusion that surrounds payment insurance policies. A series of questions will reveal which type of cover would be the most suitable for the consumer. The tables will also show how much the cover would cost and what exclusions there are in a policy. This will make it easier to decide which, if any, of the payment protection family is suitable. Exclusions can be found on a regular basis in all forms of loan protection. Being retired or self-employed, working only part time or suffering from an ongoing illness would generally exclude a person from being able to claim on a protection policy. There can be other exclusions as well, which are specifically defined by individual providers, so the terms and conditions of each quote are different and must be checked thoroughly. Also, there are sometimes exceptions to exclusions. For example, while suffering a pre-existing illness is counted as an exclusion, providing the illness has not been present within the last two years then it may be possible to claim on a policy. Those individuals who are self-employed could also claim if they cease trading through involuntary reasons. One of the best ways to take out loan protection insurance cover is by going with an independent provider. Getting several quotes and comparing them is imperative when it comes to getting the cheapest possible cover. Along with this, with a standalone provider you can be sure of getting the vital information so that you can make an informed decision. Once you have this information and have deemed a policy suitable then you would receive a tax-free income if you should become unable to work through suffering an accident, illness or unemployment that was no fault of your own. Cover would start to provide you with benefit from between day 30 to 90, depending on the provider’s terms and conditions. Once the policy is paying out then it would continue to do so for as long as 12 to 24 months, again depending on the provider, by which time you have hopefully recovered sufficiently to return to work or have found a new job.
About The Author
Simon Burgess is Managing Director of the award-winning British Insurance (http://www.britishinsurance.com), a specialist provider of low cost income payment protection insurance (PPI), mortgage payment protection insurance (MPPI) and loan payment protection insurance.
Thursday, July 17, 2008
Payment Protection
Make Sure Payment Protection Insurance Is Right For You Before You Buy
by: Simon Burgess
While payment protection insurance can be a valuable asset if you have loan or credit card repayments to make each month, it is not suitable for everyone. Some individuals would not benefit from taking out the cover because of the exclusions found in a policy. The majority of payment protection policies have exclusions. Being in part-time employment, suffering from a pre-existing illness, or being retired or self-employed could all mean cover is not suitable. Providers can also add in other exclusions to the small print and reading the key facts of a policy is a necessity. If you shop with a specialist provider for your cover then the provider should give you all the facts you need to know before you buy. This means you can ensure that the product is right for your circumstances. A payment protection plan pays out a tax-free sum of money each month after you have been out of work for a set period of time. The start date for payment varies from provider to provider but is normally within 30 to 90 days of being unable to attend your job. This could be due to suffering an accident, being ill or finding yourself unemployed through no fault of your own. Redundancy, for example, is one reason you could claim. Once the policy holder has started to receive an income then they continue to do so for between 12 and 24 months, again depending on the provider. This means they have to worry less about being able to afford financial commitments or credit card or loan repayments. When taking out a loan from the high street lender payment protection is usually offered at the time of borrowing. In the majority of cases this is not the ideal way to buy protection. High street lenders are known to charge high premiums for the luxury of having peace of mind. Even worse, in some cases they ‘push’ cover alongside the borrowing to those who would not be eligible for a pay-out should they make a claim. When an investigation by the Office of Fair Trading revealed that mis-selling of payment protection products was rife among high street lenders, people lost faith in the product. The Office of Fair Trading highlighted the fact that lenders were not making it clear that people could shop around for a policy. Some lenders were misleading the consumer into believing that the application for the loan depended on them taking out a policy. At the same time, the lenders often give out very little information, which made understanding and comparing cover almost impossible. Payment protection insurance taken with a standalone specialist provider removes the confusion associated with a policy. Providers do this by giving the facts in plain English. A specialist will also provide a quality product that can save you as much as 80% in comparison to the high-end quotes offered by some high street lenders. It is essential when comparing protection that you also compare the key facts because this is where you will find vital information regarding the cover you are taking out.
About The Author
Simon Burgess is Managing Director of the award-winning British Insurance (http://www.britishinsurance.com), a specialist provider of low cost income payment protection insurance (PPI), mortgage payment protection insurance (MPPI) and loan payment protection insurance.
by: Simon Burgess
While payment protection insurance can be a valuable asset if you have loan or credit card repayments to make each month, it is not suitable for everyone. Some individuals would not benefit from taking out the cover because of the exclusions found in a policy. The majority of payment protection policies have exclusions. Being in part-time employment, suffering from a pre-existing illness, or being retired or self-employed could all mean cover is not suitable. Providers can also add in other exclusions to the small print and reading the key facts of a policy is a necessity. If you shop with a specialist provider for your cover then the provider should give you all the facts you need to know before you buy. This means you can ensure that the product is right for your circumstances. A payment protection plan pays out a tax-free sum of money each month after you have been out of work for a set period of time. The start date for payment varies from provider to provider but is normally within 30 to 90 days of being unable to attend your job. This could be due to suffering an accident, being ill or finding yourself unemployed through no fault of your own. Redundancy, for example, is one reason you could claim. Once the policy holder has started to receive an income then they continue to do so for between 12 and 24 months, again depending on the provider. This means they have to worry less about being able to afford financial commitments or credit card or loan repayments. When taking out a loan from the high street lender payment protection is usually offered at the time of borrowing. In the majority of cases this is not the ideal way to buy protection. High street lenders are known to charge high premiums for the luxury of having peace of mind. Even worse, in some cases they ‘push’ cover alongside the borrowing to those who would not be eligible for a pay-out should they make a claim. When an investigation by the Office of Fair Trading revealed that mis-selling of payment protection products was rife among high street lenders, people lost faith in the product. The Office of Fair Trading highlighted the fact that lenders were not making it clear that people could shop around for a policy. Some lenders were misleading the consumer into believing that the application for the loan depended on them taking out a policy. At the same time, the lenders often give out very little information, which made understanding and comparing cover almost impossible. Payment protection insurance taken with a standalone specialist provider removes the confusion associated with a policy. Providers do this by giving the facts in plain English. A specialist will also provide a quality product that can save you as much as 80% in comparison to the high-end quotes offered by some high street lenders. It is essential when comparing protection that you also compare the key facts because this is where you will find vital information regarding the cover you are taking out.
About The Author
Simon Burgess is Managing Director of the award-winning British Insurance (http://www.britishinsurance.com), a specialist provider of low cost income payment protection insurance (PPI), mortgage payment protection insurance (MPPI) and loan payment protection insurance.
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