Payment Protection Insurance Cover

Anyone that takes out finance likes to have the peace of mind that they are protected against situations that could render them unable to make repayments, and payment protection insurance cover is an effective way to do this. Read more

Competition Commission still investigating PPI

The controversy over payment protection insurance has been going on for some time now, and regulators have been investigating the problems surrounding the sale of PPI after it was found that many consumers were being mis-sold this insurance, and that in some cases the cost of PPI was higher than the interest costs on a loan.

The Competition Commission has stated that its investigation into PPI is still ongoing as no conclusions have yet been reached.

The Competition Commission has stated that the issues that are being considered are complex and therefore more time and consideration is required. The Competition Commission plans to publish its provisional findings in May of next year. The chairman of the inquiry stated that the Competition Commission had already reviewed a substantial amount of evidence, but added that there were areas that needed to be looked into further.

The chairman stated: “We are far from making up our minds. But we are focussing on the amount of competition for PPI that distributors face at the retail level.”

He added that the Competition Commission was aiming to complete the inquiry as soon as possible but had to take into consideration areas that needed to be looked at further. He said: “…we are also conscious that the issues we are deciding upon are by no means simple and it is vital that we carry out our work thoroughly, ensuring that all parties receive a fair hearing.”

A number of issues relating to PPI are being looked into by the Competition Commission. This form of cover is designed to protect against falling behind on repayments on loans, credit cards, and other forms of finance.

Alan Wright
13th November 2007

FSA to publish new PPI guidelines

The UK’s financial regulator, the Financial Services Authority, is to publish new guidelines in relation to Payment Protection Insurance on its website next year.

Payment Protection Insurance, or PPI, has been at the centre of controversy over the past year, with many claims that this type of insurance was being forced onto borrowers, mis-sold, and in some cases added onto finance deals without the consumers even knowing about it. Banks and lenders make a lot of profit on the sale of PPI, but in many cases customers end up with expensive policies that they cannot even benefit from.

Payment Protection Insurance is designed to help those taking out finance, such as credit cards, loans, and other forms of credit. The idea behind the cover is that consumers will be covered for a specified period in the event that they are unable to work and therefore make repayments due to redundancy, illness, or accidents. However, research was carried out by various agencies, and the industry came under severe criticism for the inappropriate sale of policies amongst other things.

Many people have ended up purchasing PPI that is not suited to their needs as a result of this mis-selling, and the FSA aims to steer customers towards suitable plans based on their needs via the website. Customers will be asked a number of questions on the site, and will then be able to view a choice of suitable policies so that they do not end up purchasing inappropriate PPI.

In addition to helping consumers to find the right PPI policies for their needs, the FSA has also promised that it will be taking far more stringent action and imposing far higher fines on companies that are found to be mis-selling Payment Protection Insurance in the future.

Tom Smith
4th November 2007

Benefit from low cost home insurance cover from Sainsbury’s

Supermarket giant Sainsbury’s recently announced changes to its credit cards that meant consumers would be able to enjoy longer interest free periods on purchases in addition to a low life of balance transfer interest rate, as well as other benefits.

The supermarket giant has now announced that it has some good news for homeowners that want to enjoy the peace of mind and security of having comprehensive home insurance cover in place without having to pay over the odds on this type of cover.

Sainsbury’s has announced a special deal that will be available for consumers that wish to purchase both buildings and contents insurance cover as a bundle package. These consumers will be able to get twelve months of cover for the cost of just nine months, saving them 25% on the cost of their premiums right away.

Furthermore, consumers that make the purchase online will be able to save a further 10% on the cost of their cover, which means that some consumers could save a whopping 35% on the cost of their cover for a year.

The offer is open to consumers that take out cover before the 27th November, and could attract many customers who are taking out cover for the first time or are due to renew their cover. As a special bonus consumers that take out this cover before 27th November will also enjoy being in with a chance to earn one million Nectar points. The cover includes protection against accidental damage, and customers are able to pay conveniently and easily by direct debit.

Officials from the company state that although insurance premiums on home and contents cover has risen recently, particularly after the flooding problems that hit the country in June, there are still affordable policies and deals available.

Tom Smith
9th October 2007

Nationwide stops PPI sales

The largest building society in Britain, the Nationwide, has stopped sales of Payment Protection Insurance with its financial products, after admitting that customers were not being properly advised with regards to PPI by staff members.

Payment Protection Insurance has been at the centre of controversy for some months after it was found that customers were being pushed into purchasing this non-compulsory cover, and that the cover was often being mis-sold inappropriately so that customers ended up purchasing a costly policy that they would never be able to benefit from.

The Financial Services Authority has been running a long term investigation into the sales of Payment Protection Insurance for two years, and is in the final phase of its review and investigation. The cover is designed to assist those that cannot keep up with repayments on their financial commitments due to accidents, illness, or redundancy, and is sold with products such as credit cards, loans, and other financial products that may need protection.

However, the review revealed that in many cases sales staff were mis-selling this policies, making the customer think that they cover was compulsory, and in some cases even adding PPI without the customers’ knowledge. This has led to a real crackdown on the sales of PPI after many people ended up purchasing policies that they were either not eligible to claim benefits on or that they were not even aware that they had purchased.

A Nationwide spokesman stated that the halt in sales of PPI is a temporary one, adding: ‘We did some mystery shopping and weren’t satisfied the sales processes were as robust as they should be, so they have been halted temporarily.’

Tom Smith
27th September 2007

Norwich Union tried to catch out insurance customers

One of the UK’s leading insurance companies, Norwich Union, is targeting customers that hold critical illness insurance policies in order to try and find out whether they have withheld information in the past that could in effect mean that their policies are null and void.

The insurance giant is writing to five thousand critical illness policyholders to try and find out whether they withheld information when they initially took out their critical illness cover.

This is a pilot scheme being trailed by the insurance company, and the policyholders being questioned have been selected at random. However, if the scheme does prove successful then the insurance company is looking to widen the scheme to all two million of its critical illness policyholders. Critical illness cover has already been at the centre of controversy over recent years, as statistics show that around 20% of critical illness claims from customers end up getting rejected due to either incorrect claims on diseases that are no covered, or due to lack of information from the policyholder when the insurance was first taken out.

Critical illness cover is designed to pay out a lump sum to the policyholder in the event that he or she is diagnosed with one of the critical illnesses that are specified on the policy. The policyholder gets to keep the money even in the event that he or she goes on to make a full recovery from the critical illness. However, the level of rejected claims with this sort of cover has resulted in a great deal of negative publicity for critical illness insurance cover.

Norwich Union states that the exercise is to try and update all customer information before any claim needs to be made. One official from the insurance company stated:  ‘We want to be able to clearly advise people . . . how to proceed if they believe they may have missed something off their application form. We feel this is the right approach to try to help customers prevent non-disclosure in the event of a claim.’

Tom Smith
17th September 2007

The Pros And Cons Of Payment Protection Insurance

Lenders are always eager to convince borrowers to protect their repayments for loans, credit cards, store cards, mortgages and other financial products. And they have a point. People in the UK are saving less and borrowing more, with a high rate of debt. Read more

Is travel insurance more important than life cover?

Most Brits are well aware of the complications that can arise without the protection of life insurance cover. Nobody knows what lies around the corner, and an accident, sudden illness, or unexpected event could change everything in one fell swoop for our loved ones. Although nobody likes to dwell on the prospect of death it seems that many Brits are simply burying their heads in the sand when it comes to providing their loved ones with protection and peace of mind through life insurance cover, and a survey has revealed that an alarming percentage of Britons do not insure their lives.

A recent survey was carried out by Bright Grey, and a sample group of two thousand Brits was used in the survey in order to determine average figures relating to insurance cover. The results from the survey indicated that Britons considered life insurance cover to be the most important form of protective insurance, with thirty eight percent of those surveyed stating that they felt that it was most important to insure their lives. Home contents insurance and mortgage insurance cover were ranked next in line when it came to importance by the group surveyed.

However, despite the fact that the survey revealed the majority think that life insurance cover is the most important cover to have, it seems that Brits are more interested in protecting their travel than they are their lives. The most popular insurance cover, according to the report statistics, was home content cover, with seventy four percent of people having this type of protection. Hot on its heels was travel insurance cover, with sixty one percent taking out this type of policy.

According to the results of the survey life insurance cover came in third, with only fifty three percent enjoying the protection of this type of cover. Mortgage protection figures were also alarmingly low, with only twenty three percent having this type of cover. Bright Grey products director, Roger Edwards, stated: “This is a real worry. Less than a quarter of people protect their mortgage – over three times more people insure their home contents. And although people seem to know how important life insurance can be, many simply aren’t taking out cover.”