Banks Making An Estimated 4 Billion A Year Profits On Payment Protection Insurance
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Banks Profiting an Estimated £4 Billion Annually from Payment Protection Insurance
Summary
Despite efforts by the Financial Services Authority since 2005 to regulate the market, banks continue to make vast profits?"around £4 billion annually?"from Payment Protection Insurance (PPI). This issue came to light after a formal complaint from Citizens Advice to the Office of Fair Trading.
Article
Even with regulatory scrutiny, banks are still profiting significantly from Payment Protection Insurance (PPI), a fact that has drawn criticism for being a consumer "rip-off."
It's estimated that banks earn about 80% profit from selling PPI alongside loans and credit cards. Although banks have been secretive about the exact figures, the Competition Commission is pressuring them to disclose their profits.
Opting for PPI directly through a bank often ends up being much more expensive?"up to five times?"compared to purchasing it independently. Moreover, high street lenders also benefit by earning 90% of any profit if claims are lower than predicted.
PPI is typically purchased by individuals with loans or credit cards who want protection in case they lose their job due to accident, illness, or unemployment. If a policy is appropriate, it can cover monthly payments, reducing financial stress. However, it's crucial to ensure the policy exclusions don't prevent a claim. Common exclusions include being self-employed, retired, employed part-time, or having a pre-existing medical condition. Always review the fine print for additional exclusions.
The mis-selling of policies was primarily due to inadequate information provided at the point of sale, resulting in many buyers being unable to claim.
If a policy is suitable, it offers a tax-free income based on monthly loan repayments and the individual's age at purchase. Payouts occur after being out of work for a specified period, typically starting between 31 to 90 days, and continuing for 12 to 24 months, depending on the provider. Always verify these details within the policy's terms.
Choosing PPI from an independent provider can ensure transparency, cost savings, and a quality product tailored to your needs.
You can find the original non-AI version of this article here: Banks Making An Estimated 4 Billion A Year Profits On Payment Protection Insurance.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.