Payment Protection Plan Guide

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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Mis Sold PPI Online Guide

What is mis-sold PPI?


Payment Protection Insurance (PPI) is a form of insurance which is taken out to protect the repayment of debt in the case of the borrower being unable to make payments due to being made unemployed, or suffering, illness, incapacitation or death.

PPI was mis-sold to millions of people across the UK. PPI is classed as mis-sold if: it was added to a loan product without the policyholder's knowledge; the policyholder was misled into believing that PPI was not optional; the policyholder was told that a loan or credit card was 'protected' without the full conditions or cost of the PPI being explained; or if the policyholder was led to believe that PPI would help with the approval of a loan. The mis-selling of PPI happened online too; when lenders presented loan borrowers with pre-ticked boxes offering PPI cover, rather than letting borrowers 'opt-in'.

The mis-selling of PPI happened on a huge scale, with around a quarter of all PPI policies estimated as being mis-sold. This went on for a decade until April 2011. The courts then ruled in favour of the consumer, and banks and other loan companies were told they must return around £4bn to 2.5 million people. This money is only going to be returned to consumers who make a valid PPI refund claim.

Now you understand the definition of mis-sold PPI, you may realise that you are one of the victims. Look through your loan agreement and find out if you have been paying money for 'payment cover', 'ASU', 'payment protection', 'loan protection' or a similar term. If you feel that these policies were sold to you under the false pretences mentioned above you are due a refund, even if the loan which your PPI was covering has been paid back.

You may find that your PPI was paid as an additional charge with each loan repayment, or as a one-off payment at the start of your contract.

A credit report will list all of your financial products for the last six years, so this might be useful if you do not remember who your lender was. It doesn't matter if you don't have a copy of your paperwork for your loan either; once you know who your lender is, you have a legal right to obtain a copy of your original agreement from them for £1. They may not provide the agreement if your account is closed, but you can ask for a full breakdown of your account for an additional charge, which will show PPI payment transfers.

The rules of mis-sold PPI claims state that you can usually only claim if your account was active within the last six years. So as long as you were still paying back a loan and its mis-sold PPI six years ago, even if the loan was taken out ten years ago, you are due a claim.

How much can I claim?

A good Payment Protection claims management company will tell you whether you are entitled to make a mis-sold PPI claim, as well as guiding you through the claims process. You will not be able to reclaim your full loan, but the mis-sold PPI on that loan will likely still be a sizeable sum which you can reclaim.

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Payment Protection Insurance: Your Personal Safety Net

If you have ever applied for a loan, a credit card, or some other form of unsecured debt it is very likely that you have been asked to have payment protection insurance (PPI). As a matter of fact, the creditor may have required you to have payment protection insurance (PPI). This is not uncommon in the United Kingdom, especially in today's market. The economy has become increasingly shaky, with people losing their jobs each day. It would only make sense for a creditor to want to protect their assets. However, having insurance on your debt in not a bad idea; in fact, it makes perfect sense.

What Is Payment Protection Insurance? 

Payment Protection insurance (PPI) was designed to help a borrower struggling to stay current with their debts due to an unforeseen event. For example, if a borrower were to be involved in an accident, they would be able to put in a claim for PPI coverage. At this point, the PPI coverage would start, and the debts would continue to be paid. This is why we call it the "personal safety net". A safety net is in place for protection, specifically for the one that will be most hurt by the fall. Therefore, it is highly important that you ensure your safety net is in place (make sure you have PPI).

The In's And Out's

As with most any other insurance, you pay a premium to a company for the added protection. So, when it comes time for making a claim, it should be easy... right? Not exactly! All too often, insurance companies do not want to part with their money. So, what do you have to do?

It is important to find a reputable company that has dealt with PPI claims. These companies understand the "red-tape" issues that all too often hold back claim acceptance. Many people feel that they can just ask for the money, and all is well. That is just not the case. There is paperwork, there are legal issues, or your coverage may be inadequate. Without the proper representation, you just are asking to be denied of your claim rights. Secondly, why should you be dealing with the hassles and headaches that are associated with a claim; especially if you have just been in a nasty accident? You should be more concerned with ensuring that you recover properly.

We insure many things every single day. We insure our homes against fire, water and wind damage. We insure of vehicles from accidents and mishaps. We insure our material property against theft and other random events. Some of us even insure our cell phones, so why not insure our debts. Ultimately, we do not know what will happen to us in the next week, much less in the next hour. Therefore, by utilizing payment protection insurance (PPI), you can relax a little. In the event a catastrophe such as a job loss or vehicular accident occurs, your debts would be taken care of. PPI just makes your life a little easier when the going-gets-tough.

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Payment Protection - An Online Free Guide

In the UK the escalating controversy regarding the wide spread mis selling of Payment Protection Insurance, or PPI, shows no signs of letting up, with figures released last month showing most banks saw a dramatic increase in the volume of complaints in the second half of 2011. Barclays was the unlucky recipient of 'most complained about bank' stigma, although they only 'win' the individual bank award. The worst culprit as a group was Lloyds TSB, who own a number of other High Street Banks.

As well as banks, thousands of complaints were lodged against consumer credit organisations, consumer finance companies and even the seemingly more reputable insurance companies. It would seem that banks are prepared for the 'long haul' as well, as figures released in April show that the amount of recruitment going on in the banking sector is at a record high. This is largely being driven by banks recruiting qualified staff to field the vast amount of calls they are getting from unhappy consumers! The British banks have been in a similar position before, following the endowment policy misselling scandal which caught them severely understaffed, leading as a result to even greater consumer disgruntlement.

So what can you do if you think you were mis-sold Payment Protection Insurance?

Well, there are a couple of avenues you can explore. The simplest is to print off a ready made PPI Claim Letter and tailor it to fit your own situation. Banks are now experienced at receiving these letters, so there's no need to worry about making your letter too detailed, just an overview of why you feel aggrieved.

By law the banks then have eight weeks to respond to your claim. If they do not, or if they respond and you do not agree with their findings you can then go to the financial ombudsman to ask them to provide an impartial review of your claim. They will do so, and decide whether you are due compensation or not. You will need to be patient with the Ombudsman - they can take up to twelve months to decide on cases. However with some of the compensation amounts being awarded it is well worth approaching them and then 'forgetting' about if while they look into your claim.

To assess if you were mis sold PPI there are a number of avenues to consider. Firstly you need to have your PPI agreement and Terms and Conditions to hand as the wording differs between lenders. Bear in mind that if you bought the PPI online, you may have less of a case as the onus is on you to read through the terms and conditions and decide whether it is suitable. If you were sold your PPI by a person though and feel that they did not adequately explain the policy and its exclusions then you should consider pursuing compensation.

If your policy covered unemployment but you were unemployed at the time you took out the cover you could be able to make a claim. If the staff encouraged you take out the policy anyway, or did not ask about your employment status, you are in with a good case. If you were advised of the exclusion but decided to take it anyway, then you will have less of a valid argument.

They also normally (although you need to double check) exclude existing medical conditions as well as common complaints such as back ache and stress. If these omissions were not explained to you by a member of staff, you should consider making a complaint to your lender.

Its also worth doing some research online to see if your seller has already been penalised by the Financial Services Authority. If so, you could have good grounds for pursuing compensation.

There are other grounds for compensation such as feeling unduly pressured to take out the policy by the member of staff, or being told that you would not get the finance if you did not take out PPI (which lenders are not able to insist you take through them). Also, if you had existing cover which would have performed the same job as PPI you should have been asked about this by the seller - if not, again, you could be able to pursue compensation.

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