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I would like to gripe about Payment Protection Insurance (also known as PPI).
It has come to my attention that PPI is nothing but a scam. Over a decade ago, as a young man, I obtained my first (and only) credit card. I was instructed by the bank at the time, that PPI would be essential for me, to be sure my payments are covered in the event of any problems with me being able to pay back the money each month. I was never given the option of not having PPI, nor was I told clearly what the terms and conditions were. In short, I was mis-sold it.
So why do I suddenly think it's a scam? Because I've opened my eyes. I've realised that quite simply, it's protection money. It's no different from big scary gangsters aggressively playing on your fears to extract money from you. They scare you witless with talk of disastrous scenarios like "critical illness" and "redundancy" and make you feel stupid for NOT buying this so called insurance.
But I've done some research and found the reality: Only a tiny fraction of PPI subscribers ever actually make a claim, and of them, only a tiny fraction successfully get a payout. In short, it is useless, and you'd be better off putting away some spare cash for such emergencies in a proverbial shoe box under the bed!
I've written to my credit card company telling them I wish to cancel my PPI cover, as I was mis-sold the PPI cover and I want a full refund of all payments they took off me since I've had the account. This may sound absurdly optimistic, but before you laugh, Google it. A lot of people have done this, and got a good result.
I also had PPI as a separate policy connected to my mortgage. This, too, I came to realise, was useless. So many ifs, buts and maybes in the event of a claim, that it would be almost impossible to get them to cough up, if/when I needed it.
Every last trick in the book is there, from a 3-month deferment period, to exclusions if you're deemed to be in a risky industry, to invalidating the policy if you do so much as a single hour of paid work after redundancy, and a whole raft of exclusions that would invalidate the majority of claims.
I could almost be lazy enough to let it go...
All of which, I could almost be lazy enough to let it go... Except that recently, they wrote to me out of the blue to inform me that due to the "economic downturn" they've had to increase my monthly premium by 100%. This was the last straw, and I've cancelled that policy as well. (Although they did not show the courtesy of replying to my cancellation email).
More web searches relating to The Great PPI Rip-Off have revealed shocking results and made me feel rather silly for ever falling for it. If you have PPI or are thinking of getting it, I strongly suggest you do a bit of research before giving them a penny. If something seems too good to be true, it probably is.
In summary, PPI is just another dirty trick by greedy financial institutions. I'm not falling for it any more. It's better to save up my own personal "rescue fund" in a safe place, so it's there as and when I need it, no ifs buts or maybes, it's mine and I can get to it whenever I want.
PPI really is P*ss Poor Insurance. I just wish I knew this years ago. But I will save myself thousands in future by walking away from it now.
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Follow a wise course (as many proponents do) of the sagely advice published in a well-known book: Set aside 10% of everything you earn.
The premiums charged are worthy of being at high risk which they aren't, so it is a hyped-up premium to rip customers off which is more likely to fool the many who aren't very good with evaluating.
They try to sell it by stating the worst possible situations which are very unlikely.
What is more is they charge you based on your balance but only protect you based on your monthly payments. So if you have a balance of £5,000 but pay £100 monthly, then PPI which is charged monthly for monthly protection should be based on £100 and not £5,000.
They think many don't realise this, so if you didn't then now you do and please don't fall victim to these hyped-up premiums based on false risks.
Tell them where to go when they give you the spin and if you remember, ask why the monthly protection is based on the balance when the balance isn't what is being protected - they won't like that.
no_need_for_ppi