Payment Protection Guide for You

Mar 27
08:36

2012

Voice Force

Voice Force

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This article is written for public benefits. If you read this article, it will give you a clear idea about payment protection.

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Payment Protection Insurance acts as the backstop against the unexpected. When you take out a major loan,Payment Protection Guide for You Articles particularly a mortgage on a house for example, Payment Protection Insurance is additional coverage that steps in if you are unable to make your loan payments on time, usually because of an unexpected event that prevents you from making the monthly loan payment yourself.

Payment Protection Insurance or PPI has been used by millions of people to cover such large loans and although in most cases it has never been used, it does bring peace of mind to the borrower who no longer has to worry about an unexpected event such as an emergency medical situation, death in the family, being laid off from work or other circumstance that prevents that person from meeting their loan payment.

There are a great number of companies including banks that have issued payment protection to their clients, often at very competitive rates because the need for such insurance is great and the competition has led to lower, overall prices for PPI and in most cases the contracts represent the right amount of coverage for the loan that fits the needs of both the lender and the borrower.  

However, there have been a great number of instances where PPI has either been oversold or mis sold to those who didn’t need either the type or amount of coverage that the policy provided. In these cases, the companies that issued such PPI policies literally overcharged their customers and are now subject to paying back all the people that were swindled by their actions.

While no one knows for sure when mis sold PPI policies began, the problem was first called to attention around the year 2000, which means that many PPI policies that were sold in the late 1990s may also be bad as well. While 2006 saw the introduction of stricter regulations, it wasn’t really until 2011 that PPI contracts overall improved and instances of bad or mis sold PPI policies became few and far between.

The amount of money that you may be owed if you have been mis sold payment protection could be considerable indeed. Often, the PPI was incorporated into the loan payment itself and may represent 15 to 30% of the balance, depending on how the loan was written.

If you have taken out a PPI on a loan, you should act in your own best interests to see if the contract you signed is one that covers your needs and not overcharges for the services rendered. Examination of your policy can be done by professionals without charge to see if you have been mis sold a PPI policy. In many cases, people have been under the mistaken belief that payment protection was mandatory and have purchased the PPI under that assumption. However, there are many types of loans depending on the type or size of the policy where payment protection was not needed. Either because the loan itself was too small or was not the right type to be covered by payment protection. In these instances, you need to check with the professionals who can get you your money back.