Do I really need PPI?

durham_girl

Hi Guys,

Me and the hubby took out a loan for 20,000 last march with PPI. At the moment the balance of the loan is 35,000. I know if we cancelled the PPI the repayments and the balance would go down and at the moment that's what I really need. My question is how important is PPI and do we really need it?

Cheers in advance!

Louise x

Laurenbelle

My answer to that is YES i think insurance is a great product to have as long as it is the right product and it suits you. There are too many people (in my oppinion) that have taken this NO INSURANCE (PPI, PLRC) FROM THE BANK as meaning no insurance at all and i don't think that is the correct thing to do. So please make sure you are adequately covered in one way or another. JMO

tom188

Could you cover the required repayments if one or both of you lost your jobs or were unable to work because of ill health?

roswell

Laurenbelle wrote:

My answer to that is YES i think insurance is a great product to have as long as it is the right product and it suits you. There are too many people (in my oppinion) that have taken this NO INSURANCE (PPI, PLRC) FROM THE BANK as meaning no insurance at all and i don't think that is the correct thing to do. So please make sure you are adequately covered in one way or another. JMO

The insurance doesnt protect "You" its protects the bank ... think about it, if you have no money to pay the loan through loss of job etc then you negotiate a repayment plan if that doesnt work you go to court and offer a token payment or get a charge on your property.

lets assume like the example above they borrowed 20 000, the amount plus PPI plus interest is over £35 000 so not only is he bank getting interest there getting near enough 75% extra than what they lent out, how oftern will someoen claim on there PPI ??? i bet thousonds and thousands of loans complete each year with out PPi being claimed on.


I think you will also find most PPI is worth about as much as the ink used on the paper to print the T&C`s most have clauses like " Unable to undertake Any job" etc before they will pay out eg " Could work in bar / bin person / street sweeper / pavement chewing gum removal agent, these may not be jobs you are willing to do but therefore allow the PPI to not pay out.


Unless the OP and there partner are both at risk of long term unemployment for the forseable future and unable to work again i think its worth binning.

Astaroth

It is insurance and so all comes down to your appetite for risk. As the two previous posters have demonstrated this can vary greatly.

I would disagree that PPI protects the bank and not the customer as a lot of banks write their own policies anyway so if you do claim it comes out of their pocket. Secondly it stops you having the stress of being taken to court for your debts, having charge orders made against your property etc at a time when you are already low due to sickness or unemployment etc.

Like all insurance, people will say it was worth every penny when they have made a successful claim and others will say it isnt worth the paper it is written on when they have paid for 10 years and never made a claim.

DavidHM

... or if I had PPI on my one and only outstanding loan, I'd have paid 100% more in premiums by the end of the term than the maximum amount it would have paid out even with a successful claim.

Naturally, I passed on that one. I don't disagree with PPI in principle when there is no readily saleable asset to back a loan but most PPI products that are sold are utterly horrible even if you ignore the manner in which they are sold.

(I would of course admit that my low loan APR is being subsidised massively by those who do take the PPI on it).

Astaroth

But in most cases you can make more than 1 claim on a policy and whilst a policy may have a max 12 month clause on things like unemployment the majority will simply clear the outstanding loan if your medical experts will confirm that you will not be fit to return to work before the end of the loan

Mark7799

As a short answer, I would say that AN insurance policy that provides you with income to meet a commitment in the event that you cannot pay though illness or other circumstances is desirable, whether or not the policy being sold by the financial institution you are borrowing from is the best value for you is another matter.

regularsaver1

sometimes pays put for 5 years in total disablement

or clears the loan on diagnosis of a critical illness when you really don't want the hassle of having to arrange a payment plan for debts

regularsaver1

some banks offer an advised service (where they will make a recommendation and record reasons why) and some offer non-advised (where they can not recommend to you)

either way they can only talk about their own insurance / their own products