Why people should consider protecting themselves.

PBA

homer_j wrote: »

I think that insurance should be compulsory with mortgages and not for my pocket but because of the benefit it gives.

This may be semantics, but I'd say that insurance shouldn't necessarily be compulsory, but having the risk underwritten should be. In the case of my mortgage, we could afford it on one salary if one of us lost our job and my parents would be happy to help out if something worse happened. Therefore the risk is effectively underwritten without us needing to pay extra for insurance.

homer_j_3

mdstevensuk wrote: »

hi yes it was aded to the loan, but no where did it say that if you paid off the loan early that we would also have to pay the remainder of the ppi.

If it is added to the loan,it is added to the debt so you have effectively borrowed and extra amount to pay for this rather than on a monthly basis.

Its not something I have ever sold in a lump sum format but you may be able to apply for a refund on the bit that you have not used but you would have to apply to the insurer not the lender. Have you done this?

homer_j_3

PBA wrote: »

This may be semantics, but I'd say that insurance shouldn't necessarily be compulsory, but having the risk underwritten should be. In the case of my mortgage, we could afford it on one salary if one of us lost our job and my parents would be happy to help out if something worse happened. Therefore the risk is effectively underwritten without us needing to pay extra for insurance.

I accept that there will be exceptions to the case but generally most people I see could afford on 1 wage nor have family that are so well off that could sustain a mortgage payment for them if they were not able to.

Underwritten insurances are good as it will reduce the times peoples claims do not pay due to non disclosure of facts etc.

mdstevensuk

Hi, no we have currently got the house up for sale due to finacial problems and are currently fighting picture finance to drop the £12,000 PPI they are asking us to pay. We only borrowed £49,000 and have had this loan since August 2006 so effectively have not even used a full years insurance, but they insist we pay for the full 5 years cover.

homer_j_3

Have a look at this and let me know what you think.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2007/043.shtml

mdstevensuk

Hi thanks for that, we have since contacted the FSA and they have sent us a form to fill in as they say Picture finacial cannot ask for payment for the 4 years as the insurance will be invalid if we no longer own the house.

Many thanks for your help

Melanie

homer_j_3

No problem - I am glad Icould help and that it looks like that you are going to get some of your money back.

robwend

without being rude but you guys saying we should have mortgage protection is all well and good. but i think in marias case it sums up alot of people that i lack sympathy for. ....they have loads of loans debts ect and dont think ahead. i owe nothing but my mortage, all my freinds are maxed out to the hilt! but i know when the rugs pulled away from me if ever il be ok, i can always go on intrest only mortgage and start again

dunstonh

Dont mix up loan company sold protection with advice sold protection. Covering a need with a decent product is very different to being flogged a policy on dodgy grounds by someone that isnt FSA authorised to give proper financial advice.

careerlady

I have to agree with wecanhelpu 's reply - I have known many friends in high positions with these insurances and they have NOT paid out on some clause or another - in my experience if an insurance company can get out of paying then it will.