What is payment protection insurance (PPI)?

It is an insurance policy that will cover all or part of your monthly instalments on your loan if you lose your job, or if you are on leave due to illness or injury.

The main issue with this type of insurance is that it is often included without the customer’s prior consent. Also, they often contain a number of coverage exclusions, i.e. specific situations in which the insurer will not be liable for paying out. They can add it to your contract even when they know you are affected by one of these exclusions.

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