Infinite Wizdom

Summary

The manner in which the insurance industry is tackling the mis-selling of life insurance. The difficultiesconnected to payment protection policies are pointed out.

The mis-selling of life insurance policies by a large amount of mortgage providers has to be addresseddealt with|tackled} by the Government. Steps have been taken by the DTI, who have almost concluded their enquiriesinto the tie in of home insurance with mortgages. An announcementbarring the procedure is Mr Southcarries on that while providers may not insist on customers taking out Life Insurance Quotations , they can be persuaded that they do not have a choice, through the provider being ambiguous with the truth.

60% of life cover is sold by mortgageproviders, although it can be bought through independent advisers or direct providers.

Then again a DTI spokesman has said that their investigation carries on into a massive range of insurance tie-ins. A lender who met Edward Milibrand has said that life insurance has been glanced at, while more emphasis has been focused on home insurance.

The problem with consumers being pressured into buying uncompetitive life insurance and home insurance plans is just as important for both products.

The problems are doubly acute with PPI. Around half of all consumers who have been influenced into taking out a PPI may have been given the wrong type of insurance. Plus the majority of individuals who bought one of these controversial insurances expect a lot more than they would actually receive if they were unable to pay their bills.

A broad investigation has found that approximately 26% of people believe that they will be paid a monthly income from their PPI policy, not understanding that the insurance would only cover their debts.

A further 15% said they believed the policy would cover them if they if they were unable to meet their repayment commitments for any reason, and six per cent said they believed tha| their medical bills would be paid if they became sick.

Many people thought the policy would carry on indefinitely to cover their outstanding debts, others thought their policy would cover breakdowns and living expenses.

Annual sales of Payment Protection Insurance policies are said to produce payments of about 6.4 billion pounds for the finance industry. However an astounding £4bn of this is said to be sheer profit. Studies suggest that several banks can charge up to 500 per cent more than others for similar.

The OFT is studing the sale of PPI preceding objections from the National Consumer Council and Citizens Advice. It recently highlighted concerns that banks are attracting customers by advertising apparently cheap loans and then hammering them with huge additional costs by selling expensive PPIas part of the transaction.

As a result, a loan which appears to offer good value can end up being far more costly.