A lot of people have taken out this so called insurance over the last few years. From small loans for furniture on by now pay later policies to much larger loans and even home mortgages, Payment Protection Insurance (PPI) was frequently included in the monthly cost.

A simple payment to protect your debts
The idea was simple. You pay a little extra on your loan each month and then should you find yourself out of work for whatever reason, the Payment Protection Insurance kicks in and covers the monthly repayments that you cannot make.

It does sound great, an insurance policy that will keep the debt collectors off the door step if you lose your income. However, covering absolutely everyone could have been extremely expensive for the insurance industry, so they cover their own backs by disqualifying a lot of borrowers.

But not everyone can claim
Exactly who was disqualified from a claim would have depended on the exact policy, but factors may include your age; whether you are in full time or part time employment; self employment; length of time working for the employer; when you found out that your job was at risk and a whole lot more.

And the worst of it is that some of these criteria make it obvious from the start that the policy would never have paid out. But, even though this was true, the salesman selling the loan forced the customer’s hand and got them to take out a worthless PPI policy. Why? Well usually because they are on a fantastic commission per policy sold.

My own situation
In my own case, PPI was added to a loan for furniture that I was buying on a buy now pay later policy. The salesman had asked me about how safe my job was and I told him I was self employed (and excluded from their policy). He asked what would I do if the monthly income didn’t cover the repayments and I told him that I had already saved up the cash for the purchase and it was in the bank. Again, I another reason for not needing PPI - I had the loan covered.

In my case he amended the paperwork after I signed it, but I was fortunate enough to see this in time and paid off the loan before any payments kicked in.

If you are not so lucky
However, if you have had to pay for PPI payments, whether you needed the cover or not, then you might find that you can reclaim the payments that you have had to pay out. Whether you have cancelled the cover or not, if you have paid out the premiums you might be able to reclaim them with some suitable help.

Written by Keith Lunt. If you want to know more about how to reclaim PPI or to start the process to claim back PPI for yourself, call in.