Although payment protection insurance is a decent idea, it also has its own disadvantages and limitations. Before buying this policy, you have to be familiar with these limitations in order to set your expectations straight. Once you have learned what payment protection insurance can and cannot do, it will be easier for you to determine whether you will really benefit from it or not.
PPI the underlying problems
When it comes to payment protection insurance, there is nothing wrong with the product itself. However, the cases of mis sold PPI and unreasonable insurance premiums have actually put thousands of consumers at risk. Here are some of the most problematic issues that were frequently related to this intriguing insurance policy.
Although strict rules regarding the selling of PPI have already been implemented, many lenders and companies are still breaking these rules. Their aggressive towards customers who cannot really make a solid PPI claim has led to an increase in the case of mis-sold PPI policies. According to research, almost two million policies have already been mis-sold over the past few years.
The next problem is its unreasonable monthly premiums. As one of the biggest businesses in the insurance industry, it continued to generate huge profit despite the controversies it has been involved with. Although it implements a number of medical exclusions, most consumers who are unaware of these limitations still purchase it for future use.
Examples of its medical exclusions are pre-existing medical conditions, back pain, and stress. This can make it harder for you to make a claim in case of emergencies due to the conditions that were previously stated. All of these limitations have made thousands of consumers doubt its reliability as an insurance policy.
Finally, you may be required to pay for the policy even after it has expired. This means that you will still need to pay for the interest rates of an insurance policy that has already been expired for years. If you do not want to be caught in this kind of situation, payment protection insurance is not good for you.
Mis-sold PPI are you a victim or not?
If you think that you may have been a victim of mis-sold PPI policies, you have to be familiar with the generic mis-selling checklist. After answering its yes or no questions, you can easily tell whether you are really a victim of mis-sold payment protection or not.
Did the sellers tell you that payment protection insurance is optional? If they told you otherwise, you are a clear victim of PPI mis-selling. Whether you want to apply for car loans, credit cards, or other financial agreements, you always have the option to buy this insurance policy or not.
Did they inform you about the particular limitations or exclusions of the policies they are offering? If they did not tell you that a pre-existing medical condition and a self-employed status can make it impossible for you to make a claim, you have the right to cancel your policy and file a PPI claim.
A PPI policy can last for five years or less. If the financial agreement offered lasts longer than the typical duration, did your financial adviser tell you about the required payment terms? This means that you may need to continue paying for the policy even after the insurance has lapsed. You also have the right to know that you will need to pay for the interest even after your PPI policy has expired.
If you answered no to any of these questions, you can start drafting a formal complaint to get a full refund. You can hire a claims company to do all the hard work for you if you do not want to handle the complicated process of filing complaints. Regardless of what your final decision is, just make sure that it will be good enough to uphold your rights as a consumer.
