As the name suggests PPI or Payment Protection Insurance is an insurance product that helps borrower to repayment of loans or credits if the borrower dies or faces any accident or unable to repay the debt due to some unavoidable circumstances. PPI insures consumers to repayment of loans, so in one word it can be called ‘˜loan protection’. Banks and other credit providers sell PPI as a part of the deal when people take out loan, mortgage or credit card. But stand alone PPI policy is also available in the market to buy. The benefits and offer of the PPI differ from policies to policy. Not all the policies have the same facility. Payment protection insurance can be purchased to insure loans like car loans, home mortgage or loans from a finance company. The concept of PPI is not useless but the way it has been sold has created confusion among the people.

Get a clear idea about PPI with these below mentioned points:

Many lenders offer these policies when borrowers apply for a loan. So one has to be very careful whether he or she does really need it. If one needs it then there should be separate application forms for the loan and the insurance.

PPI generally covers monthly repayment or a small portion of them for a limited period of time (generally 12 months).

It is very essential to know that minimum repayment amount is very less to reduce the main amount quickly.

PPI is very often miss-sold to the customer. So be careful before having it.

People between the age group of 18 ‘“ 65 can only have PPI. People out side this group not eligible for PPI.

Temporary or contract workers cannot have a PPI. And PPI does not cover a customer who is under medication already.

The PPI premium is generally charged on monthly basis but the amount depends upon the lenders. There is option for ‘˜single premium policy’ where premium may be added to the loan up front.

PPI is quite expensive. Thus if you have already other insurances like life insurance, serious illness or income protection Insurance then you may not also have it.

There are complains that the PPI policies are being turned down by the companies. Means that the insurance company has refused to pay out because of some clause. So get a clear vision about PPI before opting for the policy.

Remember there is no dead line to claim a PPI policy. As long as your account is active you can claim for PPI.

You can cancel a PPI if you are not satisfied. In that case give them in writing that you want your policy to be cancelled and then check it again that they have actually done it.

If you think that you have been mis-sold a PPI then you can ask your lender to review your file and can taken to the higher authorities unless and until you are satisfied.