PPI Can Add to Debt Problems

Abacus Finance offers the full range of debt solutions such as IVA's, Debt Management and Repossession Prevention solutions. However, the extent of many of our clients' problems are made worse by paying a hefty payment protection insurance premium for a policy they can't claim against to help them.

This is simply not right. PPI is intended ease indebtedness, not add to it. In some cases, we've had clients face repossession as they've missed mortgage payments, in part to be able to afford PPI for credit cards and other unsecured loans.

Don't Confused PPI other types of Insurance

PPI is intended to be a short term stop-gap to allow payments to continue if are not able to afford them due to certain reasons. I does not pay-off debts or a lump sum like other types of insurance cover:-

• Mortgage protection life cover
  Pays off the mortgage loan if you die.
• Critical illness (CI) cover
  Pays a lump sum if you're diagnosed with a critical illness such as cancer. The payment can be used to for medical treatment, pay off mortgage or anything else.
• Life insurance
  Pays out a lump sum if you die.

PPI makes borrowing more expensive

The Citizen's Advice Bureau has highlighted the cost of PPI, dubbing it a Protection Racket. Their findings show that increased costs to the borrower range from 13% to 56%. This is more than the cost of the interest in some cases.

Most of the profit from this goes to the loan company selling the policy, not the insurers providing the service.

If you decide you do require PPI, then shop around for the best deal & policy to suit your needs. Similar cover can be found for 30% of the cost from specialist providers compared to cover sold with loans.