Consumers Need to Combat Financial War with PPI

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The recent unemployment figures are a sobering reminder to those drawing a salary of the need to protect their monthly outgoings in case redundancy strikes, warns Payment Protection Insurance lobbyist Sara-Ann Burgess from Burgesses.

Sara-Ann Burgess, MD Burgesses

Comprehensive, good quality policies at a fraction of the price quoted by banks and building societies can be sourced from independent online providers who have fewer overheads and take less profit.

The recent unemployment figures are a sobering reminder to those drawing a salary of the need to protect their monthly outgoings in case redundancy strikes, warns Payment Protection Insurance lobbyist Sara-Ann Burgess from Burgesses.

Unemployment figures for the three months up to August this year jumped by 164,000 - the biggest rise in 17 years. There are currently 1.79m people out of work and it was initially predicted this figure could top two million by next year. However, some pundits now say it could spiral to three million.

Sara-Ann comments: "Whatever the predictions, these are real people with real issues facing stressful times. Those who do not have the financial safety net of Payment Protection Insurance - a policy that pays claimants an income in the event of an accident, sickness or unemployment - are at risk of getting further into debt. Everyone who is currently employed must consider this form of financial protection, whether it's to cover the cost of a mortgage, credit card, loan or to provide a general income."

Forecasters have already placed the UK's economy firmly in recession and it's feared that redundancies experienced in the financial services, construction and manufacturing sectors will spread elsewhere.

Sara-Ann continues: "Whilst many consider PPI to be a rip-off, this is certainly not the case when the product is properly sold and premiums are not over-inflated. Although some High Street lenders have been found guilty of mis-selling and charging over the odds for cover in a bid to boost their profits, consumers should not tar all PPI providers with the same brush.

"Comprehensive, good quality policies at a fraction of the price quoted by banks and building societies can be sourced from independent online providers who have fewer overheads and take less profit."

PPI is sold per £100 of benefit and purchasers can opt for unemployment or accident and sickness cover or all three. Independent firm, British Insurance charges £3.40 per £100 for unemployment, £3.90 per £100 for accident, sickness and unemployment and £1.90 per £100 for accident and sickness. A consumer with £600 of monthly outgoings, opting for unemployment cover, would pay £20.40 per month. If redundancy did occur, the financial cushion with British Insurance could last up to a year.

The firm also offers a 'back to work' support service helping claimants with job seeking, CV preparation and interview techniques, plus access to a job vacancy database that's updated daily.

Sara-Ann concludes: "Given the TUC has warned there is no assumption that people who are losing their jobs will find it easy to get new ones, I'd be keen to invest in a policy that allows some financial breathing space. One national paper even predicted that the next two years could be amongst the worst Britain has experienced since 1945! It's a financial war out there and consumers need to combat this with payment protection."

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