Is Payment Protection Insurance A Boon Or Bane?
The PPI is an insurance policy that protects your payment capability. In other words it protects you from being a defaulter in paying your EMIs or other loan premiums. It is just like most insurance policies that are taken on grounds of unexpected future failure.
The question is “do we need to insure ourselves against unexpected repayment failure?”
Payment protection Insurance is not necessary for financially sound persons. But PPI is a boon to the person who is financially unsecured. This insurance policy covers payments for loans and keeps him from being a defaulter and protects his creditability. The loan providers, banks and financial companies sell PPI along with the loan to make sure that they get back their loan amount. This is done many times without the knowledge of customer. More that 80% of PPI are sold this way. Many people are not even aware that they are paying for the policy along with the loan amount.
The good news is one can approach the ombudsman for payment protection insurance claim if he is not told about it at the time of taking the loan. PPI claim is a tough and time taking process.
The question is “do we need to insure ourselves against unexpected repayment failure?”
Payment protection Insurance is not necessary for financially sound persons. But PPI is a boon to the person who is financially unsecured. This insurance policy covers payments for loans and keeps him from being a defaulter and protects his creditability. The loan providers, banks and financial companies sell PPI along with the loan to make sure that they get back their loan amount. This is done many times without the knowledge of customer. More that 80% of PPI are sold this way. Many people are not even aware that they are paying for the policy along with the loan amount.
The good news is one can approach the ombudsman for payment protection insurance claim if he is not told about it at the time of taking the loan. PPI claim is a tough and time taking process.
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