PPI, or Purchase Protection Insurance, is a type of insurance frequently offered with large loan services like mortgages, car loans, or credit cards. For a certain monthly fee added to the principal of the loan, the insurance promises to cover loan payments if the borrower suffers an involuntary loss of income. This can be a good service in some cases when the borrower is fully aware of the terms and conditions that apply, but in other cases the coverage is not suitable for the borrower’s particular circumstances, or they were not aware that they have a choice in whether or not they want to purchase it.
In recent years, the banking industry has faced investigation and punitive fines for wrongfully selling this insurance to customers for whom it is inappropriate or for not adequately disclosing the limitations of the coverage or that it is only optional and not a compulsory requirement to qualify for a loan. If you have taken out a loan, you should check through all the terms and conditions carefully to ensure everything is as you expected it to be, and that any coverage you have purchased really will meet your needs. If it does not, you may be able to go through a PPI reclaim process to cancel this coverage and have all your past payments plus interest refunded back to you.
