Despite its poor reputation, Payment Protection Insurance is a financial lifeline for those unable to keep up their mortgage or loan repayments due to unemployment, says Simon Burgess from independent provider, British Insurance.
The number of unemployed in the UK increased by 38,000 to 1.64m between February and April this year and, according to the Office of National Statistics, manufacturing and financial services have shed the most jobs so far with 11,000 and 20,000 respectively during Q1.
Economists predict there will be more job losses over the next two years and with the mortgage market in meltdown, banks and building societies share prices plunging and loss announcements becoming commonplace, new homes sales slumping to a 30 year low, negative equity rising and consumer spending falling, Burgess believes it is more important than ever to include Payment Protection within the insurance portfolio.
Simon Burgess says, “Unfortunately this economic doom and gloom is set to continue and impacting on all sectors, construction, retail, leisure and even Government. HMRC is scrapping 4,000 posts and closing 95 offices, a clear indication that job security is a thing of the past. Everyone must ensure they have the means to maintain their mortgage or loan commitments should redundancy, accident or sickness occur. Whilst some have savings to fall back on, others will not be so fortunate and this is why PPI is so vital. News that the Competition Commission is considering banning the sale of this product by High Street lenders should not deter people from purchasing this cover as it does add value and will help in times of hardship. Consumers need to hold their nerve and shop around. There are good firms out there, selling PPI properly at affordable prices. This cover can make the difference between losing and keeping your home.”
Income protection insurance: News update: June 2008