It’s unusual for consumers to be familiar with the names of specialist insurances, but not when it comes to payment protection insurance.
Because of the bad press this product has received over several years the name PPI is bound to provoke at least a raised eyebrow from most people.
We all know there have been problems with the way PPI has been sold by being tacked onto a loan or credit card. But I object to the fact that some bad apples in the barrel have tarnished the whole concept of PPI.
In particular with mortgage payment protection insurance or standalone income protection there have been few cases of mis-selling.
Advisers are left with a tricky situation to manage. It is generally accepted that unemployment insurance is sold and not bought. And now with these dire economic times, more redundancies and the shrinking welfare state, it is more important than ever that your clients consider their financial position.
How would they cover their outgoings if their income ceased? What costs would you suggest they cut if they asked for your advice?
It’s better to have at least discussed accident, sickness and unemployment cover with the client in case the worst happens.
What it boils down to is that both MPPI and PPI are valuable products for the right clients. Of course they won’t be appropriate for all, but if sold properly after checking suitability and ensuring clients know what they are buying then they can be offered both products with confidence.