Complaints about payment protection insurance

The Financial Ombudsman reports that they “have been receiving significant numbers of complaints about the sale of mortgage payment protection insurance this year. Sometimes called ‘mortgage protection’ or abbreviated as ‘MPPI’, this type of insurance covers mortgage repayments in certain circumstances, for example if the policyholder is unable to work because of illness or if they are made redundant.

How these Mortgage Payment Protection Policies work – and the range of benefits they offer – can vary considerably from policy to policy.

When considering complaints about mortgage payment protection insurance, the Financial Ombudsman applied long-standing approaches to the sale of insurance products and stated that the complaints settled have raised very few new issues.

A spokesperson for the Finnancial Ombudsman stated that “applying the standards set by the law, by good industry practice since the 1990s, and in recent times by the FSA, enabled us to be clear about the approach we take to the selling of insurance – and to follow this approach consistently in these cases. As the cases show, the details of the particular policies sold, and the sales practices of the businesses concerned, can make a significant difference to the outcomes of these cases – as can the circumstances of the individual customer.

Mortgage Payment Protection Insurance is a valuable tool available to most offering protection against some of those unfortunate events that can affect your financial status and wellbeing.

Professional advice is readily available to help you ensure you understand what you are buying and help you decide whether it is appropriate for you.