25 October 2008

The Demise of Payment Protection Insurance

Going back only a few years, most of the financial press and operators in the financial market warned Financial Advisers and Mortgage Brokers that they were not selling enough Payment Protection Insurance (PPI) and that this is could result in their clients not having adequate protection and leaving them exposed. I have recently come across a number of articles in the financial press that I believe are considerably misleading and in somewhat degrading a very important insurance cover which could protect people from losing their homes, that is mortgage payment protection insurance (MPPI).


Okay, it is true that the Office of Fair Trading (OFT) , the Financial Services Authority (FSA) and the Consumers Association continues to highlight and find failings in the sale of loan and credit card PPI and all have stated in one respect that they would like to see the end of single premium PPI sold alongside personal loans.

The PPI attached to loans particularly maybe the subject of mi-selling particularly if the individual is unable to claim on the policy, however the PPI product itself is an excellent product with a very important role particularly in the current economic environment.

Consumers need to be aware that the two kinds of PPI (i.e single and regular premium) are considerably different and they need to check that the insurance that they have purchased continues to meet their changing needs. Consumers need to be rest assured that while the PPI sales process is facing a lot of negative focus in the media, most of the mortgage payment protection insurance (MPPI) sales in particular go through very robust and thorough sales process and majority of these product were correctly advised and sold.

The media need to be more accountable in writing about these financial products and ensure that they do not state that all payment protection is bad and enable consumers to remain confident that Mortgage Payment Protection Insurance is a valuable product that will ultimately help them keep their home.

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