Beware payment protection policies (PPI) which do not pay out, warns moneynet
Rising unemployment figures* likely to prompt more people to take out payment protection policies – but online financial data service urges workers to read the small print – or risk being turned down for claims
GROWING evidence that more and more people are being turned down by providers when attempting to claim on their payment protection policies (PPI) has prompted a leading financial data service to issue a ‘severe caution’ warning.
“We are experiencing increasing numbers of our site users having their claims rejected, invariably because of technicalities arising from the small print,” said Moneynet ( http://www.moneynet.co.uk ) chief executive Richard Brown.
“Most vulnerable are the self-employed and short term contract workers – many policies discriminate against this profile of worker, so it’s crucial to check the policy details before signing up,” he advised.
“Mortgage protection insurance tends to be very popular at times of economic uncertainty, and many people may feel panicked into taking out cover with unemployment figures rising – but, when bought from High Street lenders, this cover is expensive and the policies may not cover all eventualities.”
Brown also warned against personal loan borrowers wanting to pay off loans early – and then finding that their PPI cover is non-refundable.
“Many borrowers are obliged to pay up front for their PPI cover, and then find that the insurance is non-refundable, which means that even if a well- intentioned borrower wants to clear the loan early, he or she will be out of pocket with the insurance premiums paid up front.”
*Official ONS statistics (Jan 18, 2006) showed unemployment rose for a 10th consecutive month to 5% and to a two year high.
All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.
You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.
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