Are Payment Protection Insurance Policies Always Warranted?
Some people assume that the sensible thing to do, is to get payment protection along with every bit of borrowing that they do, but this may not be the right approach.
It has been a bad time for payment protection insurance, (PPI) with Alliance & Leicester being fined a record �7m by the Financial Services Authority, for mis-selling the policies.
In total, the fines handed out to 18 separate firms, has amounted to �11m. PPI, when sold appropriately, is really effective, especially on large quantities of borrowing. It really is not warranted on borrowing, in reference to things such as credit cards, and a way to view the policies, is to consider them for high quantities of lending, such as loans and mortgages.
Premiums can be procured for as little as �10.0 on various policies, but they still need to be treated with the same level of respect as any insurance policy. You still need to be reading the small print and understanding what you are and are not covered for. You need to be diligent, and do research into the various companies, in order to ascertain who the best deal can be gotten from.
Be aware that certain circumstances will not allow you to make claims, such as that of being a self employed individual, or being a contract worker.
Be aware that banks are still guilty of quoting loans with the cost of PPI already added. Technically this is illegal, so do not let it happen to you.
Be aware that individual insurance companies will sell you PPI for a fraction of what the banks charge.