Paying my own PPI

bungle1958

The amount i was paying each month on my mortgages PPI over the term of my mortgage, worked out at almost the same as I would have received if I claimed unemployment for the 12 months I'm allowed to claim for (with a little extra for them - for looking after it for me i suppose).

So I'm really paying my own PPI and getting my own money back if i make a claim for unemployment etc.

Not to mention if i don't make a claim the Mortgage provider gets to walk away with my money plus interest.

Has anyone else thought of that one.

dunstonh

The amount i was paying each month on my mortgages PPI over the term of my mortgage, worked out at almost the same as I would have received if I claimed unemployment for the 12 months I'm allowed to claim for (with a little extra for them - for looking after it for me i suppose).

Not unusual and not an issue.

Not to mention if i don't make a claim the Mortgage provider gets to walk away with my money plus interest.

No they dont. You pay the premiums to the insurer. Not the mortgage provider. Those premiums will cover cost of supply, claims paid out and a profit.

Has anyone else thought of that one.

Yes.

[Deleted User]

bungle1958 wrote: »

So I'm really paying my own PPI and getting my own money back if i make a claim for unemployment etc.

That's no different to any insurance policy.

Are you also suggesting that anyone who has no cause to claim on their insurance should get a refund? If that happened then no Insurance Companies would exist.

bungle1958

In reply to dunstonh: Whether the money goes to the insurer or mortgage provider doesn't matter, the outcome is still the same

The payments to my 'insurer' over the life of my mortgage almost match what i would get back if i claimed for the 12 months unemployment. with a little extra for the provider.

In reply to Moneyineptitude: I was waiting for someone to bring that up. For £300 a year on my car insurance i can claim for literally thousands should i have an accident and pay for anything and anyone that wishes to claim against me. Again for another £200 a year I can literally have my house rebuilt from the ground up to the tune of £75000. And yet for a measly £300 a year the insurance company cannot pay my mortgage for a period of 12 months if i find myself unemployed and even then its only a portion of it. What good is that if I'm only going to get £60 a week job seekers allowance.

when ever reference's are made to insurance companies its usually based on a year's subscription. when insurances have anything to do with mortgages its usually based on the lifetime of the mortgage. So i broke down insurance I've paid over the life time of the mortgage into yearly payments.

The ppi just feels wrong when it comes to covering my mortgage should i find myself out of work. And its not as if I'm making my self unemployed deliberately.

And I think the same principle applies to credit cards.

magpiecottage

You misunderstand the point of the cover.

It is in place from day one. If a month into your mortgage you were unexpectedly made redundant you would be covered after paying a couple of premiums.

It is also there to provide time to get back on your feet - not to pay out forever. Once back at work you can normally renew cover.

bungle1958

I am aware of that, that's why i use a period of 12 months because that's all you can claim for at any one time. after I'm back on my feet again, the premiums will go up to cover the next period of unemployment. I once spent 3 years unemployed back in the 80's so even after 12 months unemployment there is still no guarantee of finding work. I even had to move away from my home town to find work and thankfully I've been in continuous employment for over 25 years. But since this PPI scandal broke out, I've looked into it a little closer i think i would rather invest my £25 a month into my own savings account or invest it. No matter how it is explained to me I'm sorry but the sums speak for themselves. The money I pay into PPI is still the amount I'm going to get back if i find myself out of work. The actual insurance provider is contributing nothing. Except they get to keep all my contributions plus interest should i never claim and that's the gamble the insurance companies take.

If the insurance company paid my mortgage to cover 12 months of unemployment then I wouldn't have a problem with it. Because if you have a mortgage your not going to deliberately make yourself unemployed. Just like you wouldn't deliberately make yourself crash your car just to get it repaired. (ok bad example but you know what i mean).

dunstonh

But since this PPI scandal broke out, I've looked into it a little closer i think i would rather invest my £25 a month into my own savings account or invest it.

Which is great if you do not suffer a claimable event. However, what happens if you suffer a claimable event in the early years? How much would the savings be worth to cover 12 months out of work?

The money I pay into PPI is still the amount I'm going to get back if i find myself out of work.

Only if you go to the whole period without suffering a claim. It wouldnt be if you suffered a claimable event though.

The actual insurance provider is contributing nothing. Except they get to keep all my contributions plus interest should i never claim and that's the gamble the insurance companies take.

The insurer is not charging you interest. So, they dont get to keep that. The premiums are not all profit. As already mentioned.

The whole point of insurance is to spread the liability amongst many people and/or over a longer period.

If the insurance company paid my mortgage to cover 12 months of unemployment then I wouldn't have a problem with it.

That is what they do.

bungle1958

But that's the risk, do I try and go the distance without trying to make a claim or do i give in and pay the ferryman. (its an expression)
well I've already done 8 years do i risk another 10 before my mortgage is paid.

Its already been proved that banks are ripping us off left right and centre. Do we still give in even though we know the facts. and continue paying or do we say enough is enough and risk it.

Having asked for my case to be looked at and asking for my money to be returned, I guess i'm ready to risk it.

I also know i'm not charged interest. If you read my entry i said 'The actual insurance provider is contributing nothing. Except they get to keep all my contributions plus interest' meaning they get to keep my contributions plus the interest it earns.

I also said 'If the insurance company paid my mortgage to cover 12 months of unemployment then I wouldn't have a problem with it'.

you said they do, unfortunately they only pay a part of it. In my case my payments are £351 a month, they would only pay £215, Which means i have to find £136 - how am i going to do that on £240 a month on job seekers allowance. I know a partial payment is better than nothing, but is it really?

dunstonh

Its already been proved that banks are ripping us off left right and centre.

Banks have never been the best place for product purchases other than core banking products. However, that doesnt mean the product types are bad.

Do we still give in even though we know the facts. and continue paying or do we say enough is enough and risk it.

Taking unnecessary risks to spite yourself is not a good idea. Taking risks you can afford to take or taking risks in areas where there are low odds of happening is quite normal.

I also know i'm not charged interest. If you read my entry i said 'The actual insurance provider is contributing nothing. Except they get to keep all my contributions plus interest' meaning they get to keep my contributions plus the interest it earns.

They dont stick the money in the bank. That isnt how it works.

I also said 'If the insurance company paid my mortgage to cover 12 months of unemployment then I wouldn't have a problem with it'.

Personally, I would prefer to keep working and never have to claim. However, the insurer would do that if required.

you said they do, unfortunately they only pay a part of it. In my case my payments are £351 a month, they would only pay £215, Which means i have to find £136 - how am i going to do that on £240 a month on job seekers allowance. I know a partial payment is better than nothing, but is it really?

The fact you have chosen a lower sum insured is your choice. It has no impact on the quality of the product as you could have chosen £351 or a different amount.