A Guide To Understanding PPI

By | November 10, 2016

canstockphoto27243957Usually, when we take out a loan or apply for credit we have the option of applying for PPI also known as Payment Protection Insurance. Most people are not familiar with the term PPI or how it can be used or what it does exactly. Basically, PPI is credit or money related insurance that protects you in the event you are laid off from work, disabled or the policyholder dies.

Once you take out a loan the bank or financial institution will ask you if you want PPI. If you choose to take PPI you need to shop around for the best rate or best deal. Most PPI policies will ask you the reason you are applying for the protection such as due to a disability, death or temporary or permanent layoff. This is to make  sure that you meet the qualifications for the insurance.

PPI is usually an option when you apply for loans, mortgages, credit cards or other types of financial products. This type of insurance protects you in the event you are unable to make payments or repay a loan due to accident, sickness or other types of financial situations. PPI gives you peace of mind know that your debts will be paid when you are not able to work. PPI is also a good profit. Many banks and financial institutions sell PPI because of the potential profit for them. However, there have been times when PPI has not protected the insured due to the requirements of the policies.

In today’s times, PPI is quite often sold to individuals without them knowing. This is because PPI is usually part of the repayment. When the final figure is quoted on loans, mortgages, etc. and it is acceptable to the borrower they say yes to the loan. Very often the monthly payment automatically includes PPI with the borrower not even being aware. So if you are considering getting a loan, mortgage or applying for a credit card, be sure to read the fine print of the contract to see if PPI is included in your monthly payments. If you find you are paying for PPI and don’t want it, be sure to do a ppi check by talking with your bank or financial institution to see if you can have it removed. You can also check with other financial experts about how to have PPI removed from you monthly payments and possibly getting a refund if you have made monthly payments that included PPI.