Unable to use payment protection without it meaning a default?

BlushingRose

Hi, hope someone can help me.

Today I've posted on the Debt Free Wannabe thread, and the issue I'm posting here was also posted there (but I was advised to repost it in here)

Today my OH rang one of the credit cards what we're struggling to pay off and asked if he could use the payment protection insurance that has been costing us £70 a month for yonks. The reply was that, yes he could but he could never use that credit card again.
This cannot be correct, surely? What would be the point of having insurance if we cannot use it without it effectively causing us to default anyway? Can anyone advise/help?

Thanks x

ACG

It will pay out if your made redundant and not able to make your payments. It wont just pay out becasue your struggling to meet the payments.

It will pay out 10% of your balance for 12 months but yes you wont be able to use your card whilst that is making payments.

dunstonh

This cannot be correct, surely?

It seems quite logical to be honest. (assuming we are talking about a claimable event that exists -that isnt clear from your post)

What would be the point of having insurance if we cannot use it without it effectively causing us to default anyway?

Its not going to default as the insurance will be paying it.

You currently have £x in debt. The insurance will kick in towards that. If you were allowed to keep spending on that card you could just go crazy with the spending and leave the insurer with the bill. Insurance is not a ticket to spend.

BlushingRose

Thanks.
No, we know that insurance isn't a 'ticket to spend' - but we were worried that we'd never be able to use the card again. ever.

However, it's clear from your answers that we misunderstood what was covered by the PPI.