Payment Protection - Miselling Facts?

By Author: Kirthy Shetty
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What is a payment protection miselling?
A payment protection is considered to be mis sold when the insurance holder was made to believe that it is compulsory to have an insurance policy. You have to compulsorily buy a mortgage protection policy along with your mortgage loan. It is also considered mis-sold when you are made to believe that if you don't buy this insurance policy, your loan will not be approved.

This policy is not supposed to be sold to a self employed person. If he has been told to purchase then this is covered under the mis sold insurance category. As it protects an employed person and pays him mortgage payment compensation when he is out of job due to redundancy, sickness or accident.

You can claim for compensation from the insurance company if you have been mis sold a policy. Every insurance agent is responsible for providing the right policy to the candidate. He is not supposed to deceive a person just to sell his policy and meet his targets.

Also covered under mis sold category is pre-existing ailment. An insurance agent must consider if the policy holder has any pre-existing medical ...
... condition or ailments as these policy holders are not provided any compensation if they are bed ridden for the medical condition which they were suffering from the beginning.

When a customer was made to sign the insurance papers along with the loan application form, unaware of the presence of an insurance paper along with it, is covered under mis sold case. A customer may have signed the form along with the loan application form thinking that it is part of the loan application form. It is the responsibility of a policy seller or agent to explain to him what a payment protection policy is and what are the conditions of applying for these policies?

Payment Protection is often added to finance agreements, loans, mortgages, credit cards, store cards and other credit agreements. Often the sales person does not explain the exclusions of the product or check that the customer would be covered by the Insurance. Therefore, you must make sure you read the conditions of the agreement carefully in order to understand what is covered and what is not.

If your lender tries to dupe you by making it sound compulsory then he is mis selling the policy. Do not heed to this. It is of course expensive to get this cover, take this only if it is really necessary.

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