Payment protection insurance (PPI) is an insurance product that helps consumers to cover the cost of loan repayments should they be unable to do so through ill-health, loss of a job or an accident. However, it has been reported that as many as 80% of those who had PPI were mis-sold the product, causing them to pay insurance premiums for something they did not even need.
Designed to cover loan or credit card repayments should the consumer fall ill, have an accident or lose their job - making it impossible for them to meet their repayments - is their still a future for PPI? We think so, because already the Financial Services Authority has fined a number of banks and the Competition Commission has created new rules for the selling of PPI.
It is perhaps unfortunate that the mis-selling of PPI has made the headlines at the time when it is of utmost important to have protection against the loss of income that would therefore impact the ability to repay any loans or credit card bills. Despite the product being mis-sold to potentially millions of consumers, PPI can still support those who find themselves in the position of being unable to meet the likes of mortgage and credit card repayments.
One demographic who certainly should consider PPI are those who are self-employed because they are often unable to qualify for unemployment cover. As self-employment figures have risen since the recession began, there is certainly still a need for PPI.
Despite PPI's recent bad press, the future for the repayment protection is not looking bleak. Banks are working on where they went wrong in mis-selling the policy, and along with the new rules issued by the Competition Commission, such cases should soon be few and far between. Payment protection insurance remains a good product when sold correctly, so as long as the banks are able to restore the trust between themselves and their consumers, PPI should be around for many years to come.
Designed to cover loan or credit card repayments should the consumer fall ill, have an accident or lose their job - making it impossible for them to meet their repayments - is their still a future for PPI? We think so, because already the Financial Services Authority has fined a number of banks and the Competition Commission has created new rules for the selling of PPI.
It is perhaps unfortunate that the mis-selling of PPI has made the headlines at the time when it is of utmost important to have protection against the loss of income that would therefore impact the ability to repay any loans or credit card bills. Despite the product being mis-sold to potentially millions of consumers, PPI can still support those who find themselves in the position of being unable to meet the likes of mortgage and credit card repayments.
One demographic who certainly should consider PPI are those who are self-employed because they are often unable to qualify for unemployment cover. As self-employment figures have risen since the recession began, there is certainly still a need for PPI.
Despite PPI's recent bad press, the future for the repayment protection is not looking bleak. Banks are working on where they went wrong in mis-selling the policy, and along with the new rules issued by the Competition Commission, such cases should soon be few and far between. Payment protection insurance remains a good product when sold correctly, so as long as the banks are able to restore the trust between themselves and their consumers, PPI should be around for many years to come.
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