Payment Protection Plan

A payment protection plan, in short, is a means by which you protect your investment or purchase. In the case of your mortgage, a payment protection plan is insurance you take out to protect you from events that would affect you financially and leave you unable to pay your mortgage. The situations may include events like he lots of your job, illness that leaves you unable to work or involvement in an accident that leaves you incapacitated. If you are unable to meet payments on your mortgage or any other large loan if this or other financially difficult situation should occur, a payment protection plan simply means that your mortgage is paid for a period of time, usually 12 months, while you recover and get your financial feet back under you.

How Does a Payment Protection Plan Work?

If you can't work for a period of more than 30 days, if you have a payment pension plan in place and you meet your policy's criteria to receive coverage, you should be able to make a claim and have your payments made, usually for up to 12 months. In some cases, payments may be made for up to 24 months, with certain types of redundancy insurance. There are, however, exclusions where the policy may not cover you. These are discussed below and you should be aware of them.

What Doesn't a Payment Protection Plan Cover?

A payment protection plan is fairly comprehensive insurance cover, but there are certain exceptions to it where it will not apply. If you are self-employed, for example, redundancy cover is different as compared to someone who is in full-time employment and loses a job. If you are self-employed, you will have to have stopped working altogether because of the injury, illness or accident itself, for example, not because you are simply experiencing a lull in your work.

If you are in full-time employment, there are some cases where a payment protection plan also will not cover you. For example, voluntary redundancy will not let you claim unemployment insurance. Because this is a choice you have made and not something that happened out of your control, any claim made would be void. If you're still not sure what is and is not covered , check with your insurance advisor. Your advisor will be able to explain payment protection in more detail and will also be able to make sure you choose the best plan for you.

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Reclaim PPI- A Brief Guide

All over the UK the issue of reclaiming PPI (or Payment Protection Insurance) is coming to the forefront of people's minds.Payment Protection Insurance is a form of insurance that is used to cover an outstanding debt, usually on a loan or overdraft. Used to cover death, sickness, unemployment and so on, PPI has often been sold under a number of different names, and has been subject to controversy of late due to the fact that many people who were sold PPI were so unwittingly, without need, want or understanding of what they were getting.

There are a number of cases in which a person may be able to reclaim PPI. If the person was unemployed, retired or self-employed for example, they would have no use for PPI and could therefore legitimately reclaim the money taken from them. You may also be entitled to reclaim PPI if you were mislead during the sale of PPI (for example, if you were told that it was necessary for you to purchase it from that provider and not made aware of independent suppliers); if you already had PPI in place; if you paid a lump sum and weren't made aware that you could pay in installments; if the terms and conditions were not explained to you clearly or if you felt you were pressured into purchasing the insurance from the supplier against your will.

It is estimated that around 70% of people in the UK may have been mis sold PPI and are therefore eligible to reclaim, although they may not be aware of it. However, many people may feel reluctant to do so due to perceived time and effort it would take. Many people also feel that they will be charged should their claim be unsuccessful, that they would only get a partial refund, that they would not be eligible to reclaim if their account has been closed for a substantial amount of time or that they would be entitled to nothing if the insurance policy itself was not defective.

All these worries however, are largely unfounded. There are many companies operating within the UK that specialise in PPI claims, as well as a huge number of websites that can help guide you through the process.

A great many people throughout the country have managed to reclaim their money successfully, in fact there is a very high claim success rate, and you should not feel deterred should you believe you are entitled to a refund. Many people are also granted a refund simply by writing to the company who mis-sold the policy to them, stating their grievances and demanding that their claim is dealt with straight away. However, if you are not offered a fair refund from the company, and still feel that your claim matches the criteria above you should continue with your appeal. Many companies will be able to process your claim and get you a good refund within six weeks, with very little hassle or effort needed from you.

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Reclaim Payment Protection Insurance

When taking out a mortgage, personal loan, credit card or store card, it’s most likely that you have come across certain insurance policies to cover your repayments if for some chance you are unable to work or made redundant. These insurance policies are known as PPI (Payment protection insurance). However PPI have gained bad press over recent years due to a mis-selling scandal in which Payment protection does very little protecting. So how does one reclaim payment protection insurance?

If you think you have been mis sold PPI then the first step to take is to contact your bank or whoever arranged your loan and insurance, to revise the policy and highlight why you deserve a refund. Many organisations offer help and advice with this initial approach to reclaim payment protection insurance with sample letters and in-depth advice. Your bank will then accept or reject your claim within 8 weeks. However it’s worthy to note that most banks may be receiving new claims whilst working on existing requests to reclaim payment protection insurance.

In most cases however, you needn’t contact your bank. Banks are legally obliged to contact their customers if they have reason to believe they have been affected by mis-sold PPI. Some have recently promised to repay all affected customers on a "no-quibble" basis. Some reasons for mis soldPPI can be down to banks systematic failures such as:

·         Call centre staff giving the impression that borrowers will only be accepted for their loans if they signed up for PPI

·         Training staff wrong

·         Automatically including the cost of the policy in the loan repayment quote

Even though Banks are obliged to contact you, it is still wise to proactively seek to reclaim payment protection insurance due to the number of new claims or if your situation isn’t being looked into.

The main problem with PPI is that there are over 20 million policies within the UK alone which generate billions for credit providers. Insurance is not included in a loans APR. So it may appear cheap on the surface. Also, premiums are often placed on the front of the loan so you end up paying the interest on them during the loan period. Some claims don’t even allow you to make a claim after the 12 month period whilst you continue to pay your premiums.

Some companies offer services to reclaim PPI in which you discuss your eligibility and where you were mis-sold PPI before being given a complaint letter to forward onto your bank or loan provider.

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