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Process to Claim PPI: An Overview
PPI or Payment Protection Insurance also known as credit protection insurance or loan
repayment insurance is an insurance product which helps one to keep up payments on their
loans or credit cards in the event of their death, illness, accident, redundancy or when one
loses a job or becomes disabled or faces any other circumstances that may prevent them
from earning any income to service a debt. Basically Payment Protection Insurance is sold by
a bank or any credit providers as an additional product to the loan or over draft product an
individual may undertake.
This PPI policy is particularly purchased by the customer or borrower but its benefits are
paid in the event of a claim that goes to the company that has extended credit to the
customer in the form of claim PPI. PPI is different from other types of insurance such as car
insurance or home insurance and it usually covers a minimum loan or overdraft payments
for a definite or prescribed amount of time which is commonly 12 months. After this the
customer or borrower may find other means to service their debt.
Many a times it is witnessed that people are unaware of the fact that they are even one of
the policy holders of PPI. There are cases, way back in 2008 in UK that as many as 20 million
policies were sold to people without their knowledge. The main reason of their oblivion to
this major cause is that, as many of the PPI products are designed to cover repayments on
loans and credit cards, most loans and credit card companies sell these PPI products
simultaneously to the customers along with the credit products and the customers remain
unaware of the fact that they have been attached with an additional policy named PPI.
Surveys show that as many as 40% of the policy holders are unaware that they actually hold
a policy.
In all types of insurance claims many are met and many of the insurance claims are not met.
In the case of PPI the number of rejected claims is higher than the number of approved
claims. However to claim PPI, one has to follow a series of procedures and has to face many
difficulties as of the fact that the PPI was mis-sold to the customers and they are unaware of
it. So it becomes rather more a false claim and people suffer a lot.