Many purchasers are unaware of PPI or Payment Protection Insurance. This coverage is sometimes referred to as credit Insurance, covering bills, mortgages and other loans if something should happen to the borrower. Expecting things to go as planned is natural but things do go wrong and insurance is there to cover the problem. However, the selling of PPI is verging on abuse with some lenders. This is being addressed in various industries and being brought to the attention of consumers.
Insurance is something everyone needs to cover the unexpected things in life. Buying large ticket items and making years of payments bring more uncertainty into the equation. Insurance would seem a necessary item for combating unexpected occurrences. Payment Protection Insurance benefits the lender but is purchased by the buyer. Home mortgages are covered by this insurance. Considering the home loan lasts for a long period of time, PPI is a good idea.
These policies are designed for times when loan repayments can’t be repaid. For example if the breadwinner of a family lost his income. In this case it would benefit the lender and the family. Lenders would be assured of repayments and the family would have the peace of mind that they can keep their home without further mortgage responsibilities.
When making purchases, Payment Protection Insurance is not always a part of the discussion. Many people purchase this item without being aware they have done so. Ironically, the insurance is not always applicable to the buyer’s circumstances when they cannot pay the debt. The loss of a job does not mean PPI will cover the debt automatically, each policy has different conditions.
Lenders find every possible way to assure the return of their money. When people find themselves in need of items or in a position where borrowing is necessary, they are willing to give themselves over in hopes that lenders will be fair. Most are but there are those special cases where lenders do not have the best interest of the customer in mind.
The best method for avoiding buying things you do not want or need is to know the company you are dealing with and its reputation. If they are dealing deceitfully, someone else has suffered long before you got there and they are willing to share the experience. In essence, do your research. The consumer must analyse the financial necessity of any expenditure and ask if a loan of a few thousand pounds warrants the need for PPI. Finalising any purchase lies with the signature of the consumer on the dotted line, until then negotiations are open. So always be careful what you are signing and ensure you fully understand the policy.