PPI -Tips on Buying
In general to be eligible for an Accident, sickness or unemployment (ASU) Personal Protection Policy (PPI).
You must:
- Be over 18 and under 65
- Be working a minimum of 16 hours a week
- Be permanently resident and working in the UK (incl. the Channel Islands and Isle of Man)
- Not be absent from work due to accident or sickness at the time your cover starts
- Not be aware of any pending unemployment at your place of work
You must also have eligible financial commitments. An eligible financial commitment is:
- A mortgage
- A personal loan
- A home improvement loan
- A car loan
- Your rent
Be aware that payment protection insurance is not compulsory and it is often best not to buy it alongside your loan, credit card or mortgage. The lender or bank may try to persuade you to take the cover claiming PPI [http://www.ppirefundsuk.co.uk/ppi/claiming-ppi.php] is essential, but this is simply where they make their biggest profits and you don't have to purchase their product.
Some companies offer cheaper loans if you take out their PPI policy along with it, but while the loan may be cheap, the payment protection insurance won't be.
Take time to shop around for the most suitable deal for you. Think about going to an independent, stand alone provider who is not 'tied' to a particular PPI provider and that way you'll have a wider choice of policy.
Examine the policy terms and conditions and see what the policy does and doesn't cover. For example, many do not cover time off work for stress or backache, the two most common reasons for absence from work!
Make sure your occupation will be covered by the insurance, in the past many lenders have taken unfair PPI [http://www.ppirefundsuk.co.uk/ppi/unfair-ppi.php] payments from customers who could never use the policy due to their self-employed status.
Find out what is the highest income amount you are insured for and how long the benefit will be paid for (typically it is 12 months but some policies pay out for up to two years)
Be aware that policy prices are currently under review by most providers due to increasing claims from people losing their jobs in the recession. Lenders can often hike premium payments with only 30 days notice?
Finally, check out the premium. Premiums from independent providers are normally cheaper than those offered by the high street banks ad lenders. In fact, you can save up to 40% on Mortgage Personal Protection (MPPI) and 80% on loan protection insurance if you shop around carefully.
The British Insurance Brokers Association (BIBA) offer the following tips on buying PPI:
- Visit an insurance broker if you don't have time to shop around
- Read the small print and check that PPI is not automatically included - it should be optional
- Check out the common exclusions to make sure all your circumstances are covered
- When taking out a loan or a credit card over the phone make sure that you listen carefully to what you are signing up to
- Ask for a copy of the insurance cover document
- Check that the insurance will cover the whole debt and not just minimum payment
- Check to see if the insurance cover being offered increases the loan amount as this will attract interest at the same amount as the loan.
You must:
- Be over 18 and under 65
- Be working a minimum of 16 hours a week
- Be permanently resident and working in the UK (incl. the Channel Islands and Isle of Man)
- Not be absent from work due to accident or sickness at the time your cover starts
- Not be aware of any pending unemployment at your place of work
You must also have eligible financial commitments. An eligible financial commitment is:
- A mortgage
- A personal loan
- A home improvement loan
- A car loan
- Your rent
Be aware that payment protection insurance is not compulsory and it is often best not to buy it alongside your loan, credit card or mortgage. The lender or bank may try to persuade you to take the cover claiming PPI [http://www.ppirefundsuk.co.uk/ppi/claiming-ppi.php] is essential, but this is simply where they make their biggest profits and you don't have to purchase their product.
Some companies offer cheaper loans if you take out their PPI policy along with it, but while the loan may be cheap, the payment protection insurance won't be.
Take time to shop around for the most suitable deal for you. Think about going to an independent, stand alone provider who is not 'tied' to a particular PPI provider and that way you'll have a wider choice of policy.
Examine the policy terms and conditions and see what the policy does and doesn't cover. For example, many do not cover time off work for stress or backache, the two most common reasons for absence from work!
Make sure your occupation will be covered by the insurance, in the past many lenders have taken unfair PPI [http://www.ppirefundsuk.co.uk/ppi/unfair-ppi.php] payments from customers who could never use the policy due to their self-employed status.
Find out what is the highest income amount you are insured for and how long the benefit will be paid for (typically it is 12 months but some policies pay out for up to two years)
Be aware that policy prices are currently under review by most providers due to increasing claims from people losing their jobs in the recession. Lenders can often hike premium payments with only 30 days notice?
Finally, check out the premium. Premiums from independent providers are normally cheaper than those offered by the high street banks ad lenders. In fact, you can save up to 40% on Mortgage Personal Protection (MPPI) and 80% on loan protection insurance if you shop around carefully.
The British Insurance Brokers Association (BIBA) offer the following tips on buying PPI:
- Visit an insurance broker if you don't have time to shop around
- Read the small print and check that PPI is not automatically included - it should be optional
- Check out the common exclusions to make sure all your circumstances are covered
- When taking out a loan or a credit card over the phone make sure that you listen carefully to what you are signing up to
- Ask for a copy of the insurance cover document
- Check that the insurance will cover the whole debt and not just minimum payment
- Check to see if the insurance cover being offered increases the loan amount as this will attract interest at the same amount as the loan.