Payment protection insurance policies were a type of insurance created to help avoid any financial disasters if the policy holder ever lost their income through the loss of their job or having an illness or health issue which led to the policy holder no longer being able to work. This does of course sound like a type of insurance policy which makes financial sense but the exceptionally strict criteria, low pay out rates and the fact they were sold to so many consumers who were not eligible for the actual pay outs has led to the PPI claims scandal that we are all aware of today.
As payment protection insurance policies were created to cover loss due to a illness or health which meant you couldn’t work anymore there were significant terms and conditions in regards to health and illness in the small print of the PPI policies. These terms needed to be outlined to the customer at the time of the policy being sold and then considered during the term of the policy.
If a customer had an existing health condition there were lots of potential issues that may arise and result in your policy being mis sold to your and not possible to make a claim to cover your payments if you were in the future unable to work. The sales person when selling the policy should have ensured that they checked with the customer whether or not they had any existing health conditions that needed to be considered and specifically any conditions that are expected or could potentially, in the future deteriorate to the point where the customer could no longer work. There are many health issues that could be covered by this and therefore any illnesses should have been discussed at the time the policy was sold.
Due to the strict criteria in regards to health issues and the payment protection insurance policies those individuals who were sold a payment protection insurance policy without being aware of it would therefore have not had the opportunity to inform the sales person of any health issues, nor would they have been informed that they may not be able to make a claim if they had a certain illness. As a result the policy will have been mis sold in more ways than one and an easy PPI claim can be made through PPI Claims Management services and a refund and compensation will be made to you.
In addition to the existing health conditions voiding a payment protection insurance policy there were further illness related issues that needed to be raised prior to selling a policy as they would not be covered. If the customer was no longer able to work for a period of time due to mental illnesses such as stress, depression and other related conditions they would find they were as standard not covered by the insurance policy and therefore unable to make a claim to get repayments met, despite potentially being under the impression that this was possible. Physical health conditions which covered some muscle and back issues also were not covered by the policy and this should have been explained to the customer prior to taking out the PPI policy. Work place accidents that result in the employee no longer being able to work for a period of time may have also resulted in issues with the PPI policy not paying out leaving further groups of UK individuals dealing with financial problems caused by the mis selling of these insurance policies.
It is also worth noting that when it actually came to the pay outs that were received from the insurance there were many restrictions and these related to the amount that would be paid out or the total number of months that you would be covered for. Firstly many policies stipulated that the initial period of illness was not covered by the policy and it was only after this set period had been met that the policy, if it met all criteria would then pay out and meet the monthly repayments. This would leave many customers in financial difficulty for several months and as they knew they were paying the PPI cover they did not plan a second alternative back up option to cover any loss of income. As an illness that results in an individual being no longer able to work is often long term only being covered for 12 or so months may have resulted in further financial difficulties for the customer. Explaining these terms would once again come under the bank’s duty of care to their customer and those customers that did not have this explained may have missed out on other important information regarding the policy and be able to make a claim back and get a refund on their policy.