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Wednesday, October 28, 2020

Customers Should Understand Life Assurance Policy before Buying PPI

Posted by admin on October 6, 2015

Many people have been mis-sold payment protection insurance by banks and other lenders. However, some customers made assumptions about what a policy would cover even when the lender described the terms of the insurance very clearly. You will want to make sure that you understand what the insurance covers before accepting it with your loans. One thing you need to understand is what a “life assurance policy” means.

  • Life Assurance Policies

Many banks and other lenders sell payment protection insurance that will cover customers’ payments if they become ill, disabled or lose their jobs. However, banks may also sell PPI that offers much more specific coverage. One of the most specific types of polices they offer to their customers is life assurance PPI.

Life assurance policies will cover a customer if their spouse passes away. This can be an important form of coverage, but it may not be adequate for many people. You will want to find out if this is the type of coverage your bank is offering and request an alternate form if necessary.

  • Some Customers Run into Issues Long After

Some customers don’t realize that they have purchased life assurance PPI. They have tried to activate their coverage after one of their family members become sick and are upset when their claim is rejected.

One customer recently wrote to Jessica Gorst-Williams, a contributor for the Telegraph to discuss her ordeal. She said that she has been paying premiums on her PPI for their mortgage with Cheltenham & Gloucester Building Society for 21 years. Her husband’s health has been deteriorating lately and wanted to have their payments covered by the insurance. She felt like she was in dire straits when Lloyds didn’t uphold the claim.

Gorst-Williams spoke with the lender and realized that she had purchased a “life assurance only” policy. She had to explain to the customer that she wasn’t going to be able to use her PPI to cover her claims unless her husband actually passed.

Lloyds offered the customer £150 since she had to do so much research, but she initially rejected the offer. She may have believed that she could get more compensation by working with a PPI refunds company. Gorst-Williams convinced the customer that the Lloyds compensation was generous since she wasn’t actually entitled to a claim at all. The customer has since changed her mind and accepted the offer.

  • Customers Should Be More Informed

Many customers are not well informed when they purchase PPI or other financial products. They may believe that they have the right to file a PPI claim when the insurance doesn’t cover everything they expected. However, the fault lies with the customer and they don’t have the option to file a claim.

You should make sure you understand the provisions of your PPI before agreeing to purchase it. Always ask your lender if you have any questions about what it entails.