Mis-Selling of Life Cover and Payment Protection Policies
Summary
The manner in which the business is dealing with mis-sold life insurance policies. The complicationsconnected to payment protection policies are emphasized.
The mis-selling of life insurance policies by a substantial number of mortgage lenders has to be attended todealt with|tackled} by the Government. Action has been taken by the Department of Trade and Industry, who have nearly finished their investigationinto the tie in of home and contents insurance with mortgages. An announcementforbidding the practice is Mr Gregcarries on that although lenders may not demand that customers take out Life Insurance Quotations , they can be convinced that they have no choice through the lender being economical with the truth.
60% of life insurance is sold by mortgagelenders, although it can be purchased through direct providers or independent advisers.
Then again a DTI spokesman has said that their investigation continues into a massive range of insurance tie-ins. A provider who met Jonathon Shaw has said that life insurance has been given a fleeting look, whereas more emphasis has been placed on home insurance.
The problem with customers being forced to buy noncompetitive life cover and home and contents insurance policies is similarly significant for both commodities.
The problems are especially acute with PPI. Around half of all consumers who have been influenced into taking out a PPI may have been given the wrong product. Plus the the greater part of individuals who purchased one of these debatable policies expect much more than they would in truth be given should they not be able to pay their bills.
An extensive analysis has brought to light that about 25 per cent of people believe that they will earn a monthly wage from their PPI policy, rather than understanding the policy would only cover their debts.
Another 20 per cent said they believed the insurance would cover them if they if they were unable to meet their repayment commitments for any reason, and six per cent said they thought| their medical costs would be paid if they suffered ill health.
Several people thought the insurance would carry on indefinitely to cover their debt repayments, others thought their insurance would cover breakdowns and living expenses.
Annual sales of PPI policies are said to make premiums of about 5.3 billion pounds for the finance industry. However an astounding 3 9 billion pounds of this is said to be pure profit. Analysis suggests that some banks charge up to six hundred per cent more than others for a comparable product.
The Office of Fair Trading is studing the sale of PPI preceding objections from Citizens Advice and the National Consumer Council. It recently pointed out concerns that banks are enticing customers by advertising deceptively cheap loans and then hitting them with massive additional costs by selling expensive PPIas part of the deal.
As a consequence, a loan which seems to offer good value turns out to be far more expensive.