In all kinds of insurance, some are claimed and some are discarded. However in the case of PPI, less are claimed, and more are rejected compared to other types of insurance. The very main reason for this is that insurance is underwritten at the sales stage and is taken out by clients without cautious evaluations as to whether it is right for their situation and condition and without watchful consideration to the policy eligibility conditions.
People who try to find and buy a policy with no advice have little recourse, and alternative if and when a policy does not do well to them. However most PPI policies are not sought out by clients and in some cases clients are not even aware that they even have the insurance.
It is a fact that PPI is widely been mis sold, with this mis selling being carried out by not only the banks or providers but also by third party brokers. The sale of such policies is typically encouraged by large amount of commissions, and the insurance would usually benefit the bank or the provider with more money than the interest on the original loan.
Certain companies build up sales scripts which guided salespeople say only that the loan was “sheltered” without mentioning the insurance or its cost. When challenged by the customer, they sometimes incorrectly stated that this insurance improves the borrower's chances of getting the loan or that it was mandatory. And here comes the disadvantage, A client in a financial difficulty is unlikely to further question the policy and risk the loan's being refused.
Many big companies with high profiles have now been fined by the Financial Services Authority for the widespread mis-selling of Payment Protection Insurance. Claims against mis-sold PPI have been slowly increasing. A customer who purchases a PPI policy may initiate a claim for mis sold PPI by complaining to the bank, lender or broker, who sold the policy.
The price paid for payment protection insurance can vary quite significantly depending on the lender. A survey of forty-eight major lenders found the price of PPI was 16-25% of the amount of the debt.
PPI premiums may be charged on a monthly basis or the full PPI premium may be added to the loan up-front to cover the cost of the policy. With this latter payment approach, known as a “Single Premium Policy,” the money borrowed from the provider to pay for the insurance policy incurs further interest, usually at the same APR as is being charged for the original figure borrowed, further increasing the effective entire cost of the policy to the client.
People who try to find and buy a policy with no advice have little recourse, and alternative if and when a policy does not do well to them. However most PPI policies are not sought out by clients and in some cases clients are not even aware that they even have the insurance.
It is a fact that PPI is widely been mis sold, with this mis selling being carried out by not only the banks or providers but also by third party brokers. The sale of such policies is typically encouraged by large amount of commissions, and the insurance would usually benefit the bank or the provider with more money than the interest on the original loan.
Certain companies build up sales scripts which guided salespeople say only that the loan was “sheltered” without mentioning the insurance or its cost. When challenged by the customer, they sometimes incorrectly stated that this insurance improves the borrower's chances of getting the loan or that it was mandatory. And here comes the disadvantage, A client in a financial difficulty is unlikely to further question the policy and risk the loan's being refused.
Many big companies with high profiles have now been fined by the Financial Services Authority for the widespread mis-selling of Payment Protection Insurance. Claims against mis-sold PPI have been slowly increasing. A customer who purchases a PPI policy may initiate a claim for mis sold PPI by complaining to the bank, lender or broker, who sold the policy.
The price paid for payment protection insurance can vary quite significantly depending on the lender. A survey of forty-eight major lenders found the price of PPI was 16-25% of the amount of the debt.
PPI premiums may be charged on a monthly basis or the full PPI premium may be added to the loan up-front to cover the cost of the policy. With this latter payment approach, known as a “Single Premium Policy,” the money borrowed from the provider to pay for the insurance policy incurs further interest, usually at the same APR as is being charged for the original figure borrowed, further increasing the effective entire cost of the policy to the client.