A Brief Article On Payment Protection Insurance
Payment protection insurance or PPI which is also known as loan payment or credit insurance is the type of insurance product that enables the consumer to ensure that the loan is repaid if the borrower of the loan somehow dies, become ill, loses a job, in short, physically becomes unable to pay the debt. Many banks and other credit providers widely practices selling payment protection insurance, which are adhered to the loan product and the borrower, can later make ppi reclaim when he needs the money.
PPI claim is the idea of claiming back what the borrower had paid to the insurance company. But the claim can also be done along with interest charges. If the borrower has paid the entire money, while claiming, the money can be earned along with interest. If the borrower while claiming refund owes money to the lender, the lender has the right to offset the PPI refund, which is there against the debt. If any insurance values are still left over, the borrower can make the PPI reclaim and the balance will be repaid to him.
Although the consumer purchases the policy, the benefit normally goes to the account of the company, which helped extending the consumer’s credit. The time for payment of PPI loan is normally 12 months. After that time, the borrower must find other means to repay his debt. Normally the period served is enough for the person to payback the debt.
Still some cases may be there as if unemployment needs to be considered where the payments may be able to make PPI claims ineligible despite the fact that the person is unemployed. In such cases, the approach, which the insurance company takes, coincides with the steps taken by the benefits agency with respect to unemployment benefits that helps the consumer own the rights to his PPI refunds.
There is a popular controversy related to ppi reclaim. In all insurance plans, there are claims, which are sometimes rejected. However, the number of rejected PPI claim is alarmingly higher. This is because, in other insurances, the consumers make the deals carefully. They are aware when to make the claims and whether it will be right for them to make claims at those circumstances. But most PPI plans are not sorted by the consumer themselves. In addition, many consumers while making PPI reclaims have stated that they were unaware of having insurance.
The purpose of designing PPI is to help in covering credit card loans and in maximum cases, credit card companies’ offer selling PPI while selling their credit product. In May 2008, 20 million PPI policies were in existence in UK, and a year after that, it increased up to 7 million. Among all users claiming PPI refunds 40% claimed to be unaware of the policy.
