Banks in Britain are still reeling from the legal ruling that forces them to reopen thousands of claims due to the mis-selling of PPI or payment protection insurance and the possibility of paying up to five billion pounds in compensation. This is because the Financial Services Authority decided that these policies are unsuitable for many customers. Although not all PPI policies are bad, there have been significant issues with whom they are sold to and how much they can cost. With this at hand, people are starting to turn their backs on PPI.

What insurance after PPI?

However, many are wondering if there are any other insurance options that can provide them with the same amount of protection that PPI offers. Fortunately, there are a number of alternatives that are often ignored but beginning to get noticed due to this fallout.

Income Protection Insurance

The first alternative to PPI is income protection insurance. Income protection insurance policies that can replace up to 60 percent of a person’s gross annual income are a much more flexible and affordable type of insurance. These policies do not only provide coverage for just one credit card or loan. They help people pay a portion of their income to help maintain their monthly payments when their income is lost due to involuntary disability, sickness or unemployment.

Instead of having to pay a premium to cover their credit card, bank or car loan, a person only pays a single premium every month for their income protection policy. This may be less than one or all of the premiums that they are paying to their lenders.

Aside from that, an income protection policy can run as short or as long as a person likes. If their income changes, they can adjust the level of their coverage easily and quickly. However, people should bear in mind that they usually have to wait for three months before they start receiving money.

Critical Illness Insurance

Critical Illness Insurance is also worth consideration. This is because it pays out a lump sum instead of providing a regular income and also works as an additional protection if a person can afford it. A critical illness policy provides coverage for serious illnesses such as cancer, heart attack and stroke.

In practice, most of these policies cover more severe ailments than just these three. A basic critical illness plan will also cover multiple sclerosis, major organ transplants, kidney failure and coronary bypass surgery. At the same time, a more comprehensive plan will provide coverage for more serious conditions. This includes permanent loss of hearing, loss of sight and a permanent and total disability that stops people from working. Some critical illness insurance policies also provide coverage against the loss of a limb.

However, these policies do not provide coverage for accidents or conditions such as stress. Aside from that, some ailments will not be covered if the policy holder experiences them at a certain age. What is good about this PPI alternative is that people can use it to pay off their mortgage or other debts.

Mortgage Payment Protection Insurance

Another alternative to PPI is mortgage payment protection insurance. Mortgage protection insurance will cover all or some of a policy holder’s monthly payments in the event that the individual loses their job or has become disabled.

What is good about these insurance policies is that many of them will pay off a person’s entire home loan should they pass away. In turn, their heirs will not have to deal with a house that has a mortgage. The price of this insurance policy varies from one person to another.

As with life insurance, the rate is based on the policy holder’s health and age as well as the current value of their home along with the amount of their regular payment and their mortgage’s current payoff amount. At the same time, their cost will also vary greatly based on the industry that the policy holder is working in.

This PPI alternative also has high acceptance rates unlike other insurance policies found today. This makes mortgage payment protection insurance one of the best options for people who are looking to protect their family’s standard of living amidst the payment protection insurance fallout.

PPI News

PPI Ombudsman Chief Quits

Natalie Ceeney has been the head of the financial ombudsman for the past four years. She recently announced that she was stepping down from the organisation.

Read More

Clamp Down On PPI Claim Telemarketers Is Needed

A new report has revealed that Britons are concerned about the nuisance PPI claims calls that they are receiving from their claims management companies.

Read More

Lloyds Banking slumps as PPI Claims payouts rise

The Lloyds Banking group has posted a third quater loss after payment protection insurance (PPI Claims) cost them another £750 million. This brings the total payed out by Lloyds bank for PPI mis-selling to £8bn

Read More

What Are My Rights On Claiming PPI On Credit Cards, Loans and Mortgages

PPI stands for payment protection insurance. It is designed to cover your debt payments if you cannot work. For example, if you were unable to work due to an illness, then your debt payments would be covered by payment protection insurance.

Read More

Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim

The following two tabs change content below.

Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.