Merits of PPI?

Discussion in 'Payment Protection Insurance claims' started by trasneoir, Mar 1, 2015.

  1. trasneoir

    trasneoir Frequent Poster

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    Where standalone Income Protection policies are available, is there ever any reason to recommend a PPI policy instead?

    My naieve impression is that PPI is a little like an extended warranty on a microwave - terrible value, hugely profitable for the seller, and no substitute for "proper" insurance. Is there something I'm missing?
     
  2. Monbretia

    Monbretia Frequent Poster

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    876
    Cost I should think would be one, PPI I image would be a fraction of the cost of an Income Protection policy albeit with much reduced benefit restricted to the particular loan being insured but proper Income Protection is expensive.

    Underwriting would be another as the underwriting questions for a PPI are much simplified, not sure what the forms look like now but there used to be only about two questions on it and a declaration signed whereas Income Protection is a fairly rigorous questionnaire and fairly restrictive re occupations etc.

    I'm sure there is more but I would consider them very different products.
     
  3. Gerry Canning

    Gerry Canning Frequent Poster

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    2,434
    ...............
    Trasneoir;.

    PPI was sold as a good product , and had it covered what consumers and a lot of the sellers of PPI believed it would cover ,we would not have the PPI scandal that thus far has cost UK banks 25 Billion and should cost Ire Banks 2.5 Billion.
    PPI solely covers the Risk of sickness/redundancy/death on the loan it is taken out against.
    The problem has been that PPI did not pay out too well, exclusions appeared? etc etc etc.

    Upshot is that Banks do not sell it any more and are trying to squirm out of miss-selling claims .

    I know little of income protection , but unless it is clearly and well sold I would be a bit cautious.
    eg. Had a nurse ,pensioned off on sickness with HSE , yet insurer would not pay out ?

    Particularly on these (income) type policies be very careful.
     
    trasneoir likes this.