These days all too many people go to sleep every night wondering how in the world they will ever make their next bill payments or keep their mortgage, especially during this time of economic crisis. This demand has created a flourishing market for payment protection insurance, or PPI, to act as an economic security feature for people who fear they may not be able to cover their debts should they face any significant economic challenges, such as a job loss or long term illness. When applied correctly this insurance can really protect a person from defaulting on their debts and dealing with the consequences; but, unfortunately, all too often this insurance is not applied correctly, or even knowingly.
The most controversial aspect of PPI plans is that for many years they were simply tacked onto loans or other planned debts without the knowledge of the debtor, whether or not their situation reasonably called for this type of protection. Payment protection insurance was simply added to every loan, every mortgage, allowing the banks to collect additional payments and fees for a program that the individual may not even need. Even worse, payment protection has a much higher rate of claims getting denied than most other forms of insurance, meaning that these payments were often pure profit for the banks rather than a meaningful service. As a result plenty of people believe that payment protection is essentially the epitome of an insurance scam perpetrated by the banks, whereas others firmly believe in the value of having payment protection to defend their reputation and livelihood in case the worst should happen.
Whether or not payment protection insurance is beneficial or yet another fraudulent charge on your loan can only be decided by you and your financial advisors. Do your research and assess whether you ever needed PPI in the first place, and if not it may be wise to file a claim to get your premium payments back as soon as possible.
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