PPI policies weren’t adequately explained to the borrower PPI was sold as a mandatory add-on to a credit card or loan PPI was sold without the borrower being informed of its purchase Here are a few of the main reasons why payment protection insurance refunds have been issued: While today’s lenders have stricter guidelines to follow when selling this type of insurance, there have been issues in the past. You may have heard of payment protection insurance claims being paid out for mis-sold PPI. These single premium policies were banned in 2009, so you’ll now pay monthly premiums instead. The full premium was often added on to the total amount borrowed, with the borrower then paying off the premium over the loan’s term – with interest. In the past, PPI was sold as part of a package deal with financial products like credit cards, mortgages, loans, and car finance. Terms and conditions will vary, but most PPI helps policy holders meet specific monthly loan repayments over a fixed term. It provides coverage for issues like accidents and illness, which is why it’s often referred to as accident, sickness, and unemployment insurance. Payment protection insurance, or PPI for short, is a type of policy designed to help consumers repay debts over a short-term, fixed period. Payment protection insurance (PPI) explained We’ll cover how payment protection insurance works below, along with its pros and cons. Payment protection insurance is designed to mitigate this risk, but it carries with it some negative historic connotations due to mis-selling. Whether due to unexpected illness or job loss, there are numerous reasons why you might struggle to repay debt.
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