Consumers shelling out more in mortgage and loan repayments because of less competitive deals should not reject Payment Protection Insurance (PPI). It is their rescue package and provides a valuable safety net in times of hardship, says Simon Burgess from independent PPI provider, British Insurance, “Borrowers must not turn their back on this cover. It ensures continuity of payments should accident, sickness or unemployment occur. People are not tied into High Street lender products with their exorbitant costs. They are free to shop around and source alternative PPI providers offering premiums up to 10 x cheaper for loan protection, 4 x for mortgage and 5 x for income protection.
Consumers will naturally reject cover they cannot afford, but those with less cash to spare need PPI more than ever as it will provide an invaluable financial cushion. PPI can be sourced very cheaply – British Insurance cover starts at £2.15 per £100 per month for mortgages and £2.65 per £100 per month for other loans.
With one million people already struggling to re-pay problem debts, mainly loans and credit cards, PPI allays the repossession fears of those facing redundancy.
In a bid to help consumers make a more informed choice and not turn their backs on this cover, the Financial Services Authority will next month launch an online PPI comparison table. Detailing the products, premiums, benefits, cover split and deferred payment periods, consumers will be able to input their details and compare appropriate products from all providers, including major lenders, brokers and independents.
Burgess comments: “This initiative is most welcome and it has been a long time coming. At last consumers will be able to easily compare costs and source cover that is not out of their financial reach. It will ensure customers spend less on PPI and give them confidence to say NO to lenders when pressurised into buying their products.”
Income protection insurance: News update: April 2008