Ignorance isn't bliss with Payment Protection Insurance

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Recent research from price comparison site moneysupermarket reveals that only one in seven Brits consider Payment Protection Insurance (PPI) as crucial and almost a quarter do not know what it is.

Sara-Ann Burgess, MD Burgesses

PPI is a financial lifeline and could make the difference between keeping and losing your home if you're made redundant.

Recent research from price comparison site moneysupermarket reveals that only one in seven Brits consider Payment Protection Insurance (PPI) as crucial and almost a quarter do not know what it is. "This is extremely concerning," says PPI lobbyist Sara-Ann Burgess from Burgesses, "PPI is a financial lifeline and could make the difference between keeping and losing your home if you're made redundant."

Payment Protection Insurance provides a monthly income, to either pay bills or the mortgage, if the policyholder is unable to work due to accident, sickness or unemployment. Policies generally pay out for up to a year and some providers give back to day one benefits, health and employment support services and Legal Expenses cover.

Premiums are costed out per £100 of monthly cover, so purchasers looking for income protection work out their monthly outgoings and calculate how much they need from their policy to meet their financial commitments. Similarly, mortgage protection covers the monthly mortgage repayments and loan protection meets the monthly cost of any loan commitments.

Policies are now available to everyone as independent PPI provider, British Insurance, recently added products for people in shared ownership schemes and rented accommodation to its range.

Research also shows that 10% of respondents would buy PPI if they felt their job was under threat and people in the finance and business sectors are more likely to have policies, closely followed by those in construction and manufacturing.

Sara-Ann comments: "Don't wait until your job is under threat to buy a policy - you may be excluded from making a claim if the insurer finds you were under the threat of redundancy at the time of purchase. Shop around as High Street providers do not always offer the best deals re; the cover they offer or prices they charge. Prices for unemployment cover with Independents start at £3.40 per £100 for Income and Loan Protection, and £1.60 per £100 for Mortgage."

She concludes: "People need to be more aware of the benefits of PPI - those who are unaware of the financial protection it provides could be putting themselves and their families at risk. In this case, ignorance isn't bliss."

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Sara Ann Burgess
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