The sheer number of payment protection insurance (PPI) complaints to the Financial Ombudsman Service due to declined claims tells us all one thing: PPI sales need advice from an expert!
Due to the number of nuances contained within the policy wording of most PPI plans it is vital to determine whether the plan is actually suitable for a potential consumer, and it really isn’t suitable for everyone.
Cover not usually suitable for…
Here is a list of characteristics for individuals who really shouldn’t be taking out payment protection:
- Any plans that contain unemployment insurance really shouldn’t be taken out by the self-employed. Taking out accident and sickness cover is fine however;
- Mortgage payment protection should only be taken out to cover the mortgage on a primary residence and not for mortgages on second homes;
- Individuals should not take out PPI if they have not been continuously employed for the last 6 months; for some plans this requirement is 12 months;
- If there is any expectation of unemployment do not take out cover. This is the case whether there have need formal or informal announcements of redundancies;
- If there have been redundancies in the last 12 months then a paper based application should be made to disclose those redundancies, it is then up to the insurer whether they accept the risk or not;
- There are many restrictions that can result in a declined claim for fixed term contract workers so advice really is needed;
- To be eligible for cover it is usually the case that you must be working in the UK and be doing so for more than 16 hours a week.
- It is also very important to note that pre-existing medical conditions will not usually be covered by the accident and sickness side of the plan.
It is unfortunately the case that failure to meet any one of the stipulations mentioned above could lead to a rejected claim.