Why is payment protection Insurance not worth the paper its written on?

Question

My son had a loan over the phone granted him and was talked into expensive payment protection Insurance. He lost his job (sacked) but could`nt take his boss to tribunal because he hadnt worked with the company for more than 12 months.?

The Insurance Company 'refused' to pay up because he was sacked.....yet the operator said he was covered for every eventuality because he had Gold cover? What can he do...He has found the clause in the paperwork they referred too, but he didnt know this.!!! Was he miss sold the Insurance.?

Answer 1

an insurance policy is usually to make money for the people selling it.

most do have a clause  "if you are sacked tough, we ain't gonna pay" because to be sacked means its your fault, by your own actions.

but it does sound like your son was miss sold the policy, but the company who sold it will say you did not read the small print, which you didn't

its not the insurance companys fault you son didn't read the samll print is it?

I feel sorry for your son, but you are supposed to rad the small print.

only thing i suggest is you explain to the loan co, that he cant pay it back yet, offer to pay say £5 month untill he gets another job, that way he is not a bad debter.

morale

always read the small print and never get loans, c.c cards if you can't pay for it you don't need it

Answer 2

I will never ever take these policies out although sorely tempted on occasions.

They have a very bad reputation and insurers seem unwilling to pay out under any circumstances. The seller of them gets about 40% commission and that is why they are so keen on them brcause ythey make little on what you buy and much on the policies they sell

Insurance Ombudsman   for you

Answer 3

If a credit card company is selling it to you, that should be a red flag that it's a rifoff.

Contact the credit card company and try to get them to honor the agreement.

I'm not sure if there is anything that you can do about this.

Good luck.

Answer 4

Your son can try to claim that the insurance was missold, but the company will probably say that he had opportunity to read the contract and if not suited with it, to cancel. First he should complain in writing to the company, keep a copy and send it recorded delivery. If no decent answer within a few weeks, do the same again enclosing a copy of the first letter, and also say he will take it to the FSA (the regulating body for lenders). or he could just try cancelling the insurance and they will refund a proportion of it. Then he will at least have the next few months payments in hand til he finds a new job.

Answer 5

Good question. It sounds as if your son was unfairly dismissed....perhaps the clause only refers to dismissal for misconduct of some sort. Why don't you consult the Insurance Ombudsman? You should be able to find details if you google the title. Good luck. Too many insurance companies get away with not honouring their policies.

Answer 6

The answer is : probably. Unfortunately the rules for selling PPI have only just changed (In January) whereby more protection is given to the customer.

As this was a distance sale, your son should have been told ALL the policy features, limits and exclusions over the phone before buying the product UNLESS he was asked if he only wanted the limited information. On completion of the contract he should have been sent a policy summary (containing exlusion details) as well as the policy document (which to fair he should have read - he had 14 days to cancel it)

The next question I suppose is why (sacked) - I must admit that the companies I deal with would exclude dismissal for failing to meet performance targets and dismissal for incompetence or disciplinary reasons.

ANother question is: was your son eligible for the insurance when the policy was taken out. Many policies require that you be in employment for a fixed time (often over a year). If the seller did not ask about his employment status then they are in breach of FSA guidelines.

I would certainly put in a complaint against the financial institution who sold him the product. (See the policy for how to complain)

(I hasten to add that if a client wants an mortgage, income or loan protection policy from us we do ask about their financial status).

Ws the policy sold on a monthly basis or on a single premium added to the loan - if sold on a single premium basis then that is further evidence of mis-selling (these policies are almost certainly finished under FSA TCF guidelines).

I would add, finally, that protection insurance IS a very important product for those who qualify for it - with the economy apprantly heaading for recession it is more important than ever that people assess what would happen if they are unable to work.

Answer 7

Yeah some insurances do have hidden catches. Here is a site with some policies

http://www.insightempire.com/Rentersinsu...

Answer 8

I think it comes down to how he was sacked from the company - what was the reason for him leaving?

Was he made redundant or was it due to a disciplinary hearing/action?

It may change how the PPI views him if the reason for him leaving his job is re-worded either by him on the claim forms or by his employer.

I think we need more info before we can give definitive answers.