subject: When Can I Use My Ppi? [print this page] If, in the last decade you have used a financial product such as a mortgage, personal loan or credit it is almost certain that you were sold payment protection insurance from your lender. PPI is designed to cover your ability to repay your debt should you find yourself in difficult circumstances such as injured or unemployed. But due to certain loopholes, lenders have been selling PPI to customers who were not eligible for the cover or who did not fit the particulars of the PPI they were sold.
The theory of PPI is great for borrowers, particularly given the rate of redundancies being made in the UK where people are losing their jobs left right and centre. It should mean that 3 months unemployed doesn't mean going hungry because of mortgage repayments, but the reality is quite the opposite; lenders will avoid paying out at all costs, often claiming that an individual is not unemployed long enough or referencing some obscure small print.
The worst of the con is that you will most likely not be able to ever use the insurance in the event of an emergency, for example; if you are over 65, employed or otherwise, you could not claim PPI because you are over the age of retirement. If you have a previously documented medical condition, no matter how small, you would not be eligible for the insurance as you will be considered a high risk customer and as you are more likely take leave on medical grounds. If you are self employed, you are considered a high risk customer, so you will not be entitled to PPI. But in any of these circumstances, banks will have no problem adding it on to a service with no intention of paying if required.
The insurance can make a significant portion of your repayments, to put it in perspective, if your PPI was 30% of your monthly repayments and you had been paying a 250,000 mortgage for 10 years of a 25 year period, with interest this could add up to over 3000 to which you are entitled to reclaim.
Anyone who has been mis-sold PPI like this or in any other fashion is more than likely to be entitled to a refund, although you will have to chase the banks for this and it is often easier to enlist a legal professional to do it for you. Even if you have been eligible for PPI, if you need to claim, the chances are that you will have to wait months before your paperwork is even looked at and in most circumstances lenders will put of payments where possible.
