As redundancies loom across the troubled property and financial sectors, a sharp rise in applications for payment protection insurance (PPI) is predicted.
Paymentcare, the independent PPI provider, has warned that anyone applying for income protection insurance knowing or having reason to suspect that they may soon be made redundant will very likely have their cover invalidated. In essence, they will be making a false declaration, which may also result in a criminal prosecution.
A key stipulation in any payment protection insurance contract is that the applicant must declare any knowledge of an impending redundancy. This is not usually buried in the fine print; it is almost always made very visible in the application forms.
Latest reports from the Office of National Statistics show that rates of unemployment in the UK are rising, and so are claimants for the Jobseeker's Allowance benefit. Shane Craig of Paymentcare anticipates that there will be a rise in people anxious to cover their regular monthly outgoings, “Under our eligibility criteria we state that you cannot be covered under our income payment protection insurance policy if, prior to the commencement of the income payment protection insurance policy, you are aware of any impending unemployment which may affect you, along with a number of other relevant criteria".
Income protection insurance: News update: October 2008