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What is Payment Protection Insurance (PPI)
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Payment protection insurance, or PPI, is insurance that will cover monthly repayments on mortgages, loans, credit/store cards or catalogue payments if you have an accident or sickness and are unable to work, or you become unemployed. This means that the insurance company will pay the monthly repayments (or a percentage of them) on your behalf for a fixed period of time if you become unable to work. It is sometimes known as ASU (accident, sickness and unemployment) insurance.
PPI can provide worthwhile cover against unexpected changes in your personal circumstances, but bear in mind its limitations and exclusions. PPI only pays out for a set period of time, generally either 12 or 24 months - although you may be able to make further claims later. You may not be able to make a claim for an illness you already have or have had before. And stress or back complaints, and possibly other conditions may not be covered, even if you can't work because of them.
Consider whether you have other insurance which already covers you, or whether other types of protection insurance may be more appropriate. Would taking out PPI be to your advantage?
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Ask the salesperson to explain the terms and conditions of the policy
and make sure you read the Keyfacts Policy Summary. Find out whether the salesperson is giving you advice about PPI.
Make sure you know what you're covered for and for how long.
The following questions and answers aim to help you decide if PPI is right for you.
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You don't have to take out PPI to get a loan. |
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Find out whether you're already protected. |
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Find out whether the firm is giving you advice, if not, consider whether you need advice. |
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Consider whether other protection insurance would be more appropriate. |
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Always read the Keyfacts Policy Summary, especially the exclusions to the policy. |
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Find out whether the policy is a single or regular premium. |
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Think about what you would do when the claims payments stop. |
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You have a legal right to cancel the policy within 14 or 30 days of taking it out. |
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Consider how much the insurance will cost and shop around. |
Know the price. Know the cover. Shop around.
Click here to read questions and answers concerning payment protection insurance.
* The information above is courtesy of the FSA
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Great British Finance Limited are authorised and regulated by the Financial Services Authority
(FSA). The FSA does not regulate some forms of Mortgage, Inheritance Tax Planning, Credit
Cards, Personal Loans, Deposit Accounts & Insurance. If you are submitting an online request,
we would advise to read our KeyFacts statement, links are at the top of this page.
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