PPI stands for Payment Protection Insurance and its purpose is to provide policy holders with assistance in covering debts. In the event that accident, illness, death or loss of job makes covering monthly payments impossible, PPI claims are then filed. A PPI policy would be specific to a certain loan or debt owed by a consumer. PPI is most common on mortgages, but is also sold on auto loans and credit cards.
PPI can be a good idea. It is up to the consumer to decide whether it is a good idea in his own situation. PPI is intended to be and should always be voluntary – something that the consumer chooses to purchase. Some loan providers have been making PPI a condition of loan approval, literally forcing consumers to purchase the coverage in order to secure the loan.
Loans can be difficult to understand and costs and fees can easily be hidden. It is up to the consumer to do his research and examine the documents carefully. If PPI is something that you want, then you can purchase the policy that is right for you and have it become part of that loan arrangement. However, if PPI is something you don’t wish to have, it is important to make sure you’re not already paying for it.
