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Mortgage Repayment Protection Insurance
You have bought a house. It is precious to you and you don't want to lose it. If at the time you took out the mortgage you bought some form of insurance from the building society or outside provider to protect you in the event of being unable to repay the mortgage during a difficult period then you may have been mis-sold your policy.
The mis-selling of PPI is one of the biggest scandals ever to hit Britain. And it is not only incredible that the mis-sold policies run into billions of pounds for up to 20 million people but that it is the nasty big banks who have been mis-selling this insurance.
The repayment of the mortgage is often the biggest outlay each month. Most people buy a house that is often just a little beyond what they can afford. It is natural and in normal times (Whenever they were?) salaries increased nicely and the monthly outlay didn't seem so large.
The idea of buying protection insurance that covers the repayments if the policyholder is sick, unemployed or for some other reason cannot pay seems like a good idea.
In fact it is a very good idea!
The problem is that payment protection insurance(PPI) is unlike other insurances such as those for a car or buildings and contents insurance. It is complicated and the small print excludes many people from ever claiming.
PPI is vastly profitable and popular with banks and insurance companies. The salesperson is also heavily commissioned and will try and sign people up without necessarily taking the time and trouble to explain all the details.
Mortgage protection insurance is not obligatory although some lenders either make it a condition or give you the feeling that you wont get the mortgage without it.
A standard mortgage protection policy will start to pay out one month after you become unable to pay the mortgage yourself although the cheaper PPI policies will have a wait period of up to nine months before the policy begins to pay.
Typical policies pay out for normally one or two years. The reason for this is that it is expected that the policy holder will be back on their financial feet within this timeframe.
The big problem is however that although you have a PPI policy you may not be able to claim on it.
In other words you have been mis-sold.
PPI is such a bad product that the financial authorities have now stopped the selling of it and the courts have ordered the banks and insurance companies to repay all the customers who have been mis-sold.
PPI is a bad product because it is very complicated and the buyer doesn't always understand the terms and conditions of the policy.
PPI won't pay out if you are off work with a medical condition that you knew about before you took out the policy. Payment protection insurance won't pay out for pregnancy. And you can't claim if your problem is stress or back related injuries.
The list goes on and on.
No wonder PPI has been withdrawn. It is a bad product that has cheated up to 20 million people out of their money.
Have you been mis-sold payment protection insurance with your mortgage?
The first thing to do is to go through your building society records and check whether you have been paying premiums for something that sounds like payment protection insurance (PPI). Or maybe you paid a one off premium at the beginning of the loan period?
Even if you don't have a mortgage now you may have had one in the last 15 years. If so it will still be well worth your while to check and claim if you have been mis-sold.