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Archive for tag: Pros and Cons of PPI

Pros and Cons of PPI

There are many insurance products you can buy to protect you, your finances, your home and your family from the worst that life can throw at them.

 Pros and Cons

In many ways, insurances are a shrewd financial move and so it comes as no surprise that so many customers were taking in by the mis-selling of payment protection insurance (PPI). In effect, you thought you were buying an insurance product that would protect your debt if you were unable to make repayments due to ill health and so on.

But it wasn't quite that simple. Customers were sold a product that was expensive but, worst still, was one that didn't cover you.

Mis-selling - what is it?

PPI may have been an OK product for some people but the way in which it was sold to customers is the problem that is now leading to millions of customers claiming their money back.

Customers were not given the full facts about the policy. For example, customers were told it was compulsory when it wasn't.

There is also the question of commission. A recent ruling now means that you could be entitled to more compensation if you were not told that the commission paid to the broker was more than 50% the cost of the policy.

Was PPI Any Good?

This has led to the fact that the product itself has taken a bashing in terms of its reputation which begs the question, are there actually any pros to buying PPI or not?


  • The whole purpose of a PPI type policy is to ease repayment problems in the event a policy holder - YOU - are unable to make repayments on loans, credit cards or whichever product the policy is applied to.  
  • If you think that your employment may not be stable or that there are very little additional employer benefits to you, then PPI is worth considering (although some experts suggest that other policies may be more suitable - always seem independent financial advice before taking out any policy of this nature)
  • If your debts are bigger than any savings or assets you have, then PPI is a prudent move to cover your income. If you are unable to meet repayments, debts can soon spiral out of control.


  • Some policies will only cover a specific debt such as the PPI policies that many of PPI Scotland's customers were mis-sold and some people say, this makes it an expensive policy for the narrow cover it offers.
  • Some policies have a 'waiting period' and cannot be activated immediately if you are made redundant; e.g. you may have find 3 months' worth of repayments to make before the PPI policy kicks in.
  • Some PPI policies also only pay out for a short period time
  • If you are self-employed or retired, you will need to check terms and conditions carefully as many policies are specific with regard to employment and types of income.
  • Check terms and conditions thoroughly - some medical conditions are excluded, such as stress, pregnancy issues, depression etc. and some pre-existing medical conditions are also excluded.

If you think you were mis-sold PPI, then Payment Protection Scotland can help you claim your money back - so call us!