UNDERSTANDING PPI
For the avoidance of doubt, this guide is designed to explain the different descriptions
of the products available within the Payment Protection range
Payment Protection Insurance
Payment protection insurance, or PPI, is the umbrella term for the Payment Protection
Products that consist primarily of Mortgage Payment Protection, Income Protection
Insurance and Loan Protection Insurance.
Mortgage Payment Protection
It provides a monthly sum to help with your monthly mortgage repayment. The amount
you can cover is limited to your monthly mortgage repayment and sometimes a little
extra to cover some bills. Where mortgage payments represent a high proportion of
their income, some customers prefer mortgage payment protection as the rates are
more favourable. Where mortgage payments represent a low proportion of their income,
some customers prefer income protection so they can cover a greater proportion of
their monthly outgoings.
With our Mortgage Payment Protection Insurance policy the maximum amount
you can cover in total is 75% of your gross monthly income, up to a maximum of £1500
per month. The amount you can cover is limited to your monthly mortgage repayment
plus an extra 25% of that amount.
Income Protection Insurance
Income Protection Insurance is co-branded on this site as Lifestyle Protection.
Cover is not specific to any particular debt and simply provides a monthly sum based
on a percentage of your income and you choose how to spend it.
Income Protection Insurance should not be confused with Permanent Health Insurance.
The latter policy provides benefits for longer periods than Income Protection Insurance.
Please note that Permanent Health Insurance does not generally include cover for
unemployment.
With our Income Protection Insurance policy (co-branded as Lifestyle Protection)
the maximum amount you can cover is 65% of your gross monthly income, up to a maximum
of £1500 per month.
Lifestyle Protection Insurance
Lifestyle protection insurance is another name for Income Protection Insurance.
Unemployment Insurance
Unemployment insurance is another name for either mortgage protection insurance
or income protection insurance.
Loan Protection Insurance
Lots of PPI providers will offer Loan Protection which is designed specifically
for a single loan but is in fact simply Income Protection Insurance. With Income
Protection Insurance you choose how to spend the benefit so you can choose to spend
it just paying the monthly loan repayment! Simply insure the amount that matches
your loan repayment.
With our Loan Protection: If you have a loan that is secured against your
main residence and you are a named party to the secured loan agreement which is
not in arrears, we may consider your secured loan to be a mortgage for the purposes
of our Mortgage Protection Insurance. We cannot confirm this is so in all cases
so please contact us before you buy to check your eligibility and do not assume
you qualify.
Sickness Insurance
The accident and sickness only option is available for Mortgage Payment Protection
as well as Income Protection Insurance. If you decide not to insure against unemployment
you can select an accident & sickness only policy and receive lower premiums.
Redundancy Insurance
Redundancy insurance is another name for the unemployment part of either Mortgage
Protection Insurance or Income Protection Insurance depending on your requirements.
Simply apply for Unemployment only and leave out the Accident and Sickness option.