Payment protection insurance (PPI) is not the actual name banks sold these products to consumers. “Payment” is a general term for any amount borrowers pay regularly for any loan, mortgage, or credit card. Banks may name these products differently. If you don’t know these names, you might be missing out on thousands in refunds. Read more about them below.
Loan Repayment Insurance
Borrowers who take out general-purpose or personal loans often receive offers for loan repayment insurance. These guarantee the basic PPI coverage: a one-year repayment scheme in case the borrower gets sick, encounters an accident, or gets unemployed. If they were already sick, injured, or unemployed during the time they purchased the policy, they must consider it invalid and mis-sold.
Mortgage Protection Insurance
Mortgage protection insurance policies can pay from one to five years of repayments for borrowers who are sick, injured, or encountered an accident. Lenders make these available to consumers about to take on multiple decades of mortgage amounts. The greater the years of coverage, the higher the repayments borrowers must make. It is invalid in case it was sold to consumers already sick, injured, or unemployed.
Credit Card Protection Insurance
Credit card protection insurance covers only one year of repayments for consumers who get sick, injured, or become unemployed. Similar to loan repayment insurance, consumers with an existing sickness, injury, or were unemployed or self-employed during the time of purchase must consider their policies mis-sold.