If you’re thinking about taking out Payment Protection Insurance (PPI) or you’re offered it when you take out a loan, you should think very carefully about whether you really need it.

This is because PPI can be very expensive and it may not be suitable for you or you may have other ways to cover the loan repayments if you need to.

Check whether you already have insurance or other benefits which will cover the loan or credit repayments if your circumstances change. For example, you might have:

• life insurance
• another illness insurance policy such as critical illness insurance or income protection insurance
• sickness or redundancy benefits offered through your employment contract which would be enough to cover the loan repayments
• insurance combined with your mortgage.

Some PPI policies will actually give you reduced payments if you already have an insurance policy which protects you against illness. If this is the case, it may not be worth taking out PPI.

Most types of illness insurance won’t cover you for unemployment as well, so if you want cover for this, you might still want to think about PPI, even if you have another policy. However, bear in mind that PPI doesn’t cover you for all types of unemployment. For example, many policies don’t cover you if you’ve been dismissed or you’re self-employed.

You might want to think about whether you have any savings you can use instead of insurance to cover the loan. However, bear in mind that you may not be able to save enough to cover a long period of ill-health or unemployment. And you may face another emergency, which would use up your savings and leave you without any cover.

If you don’t have any other way of covering the loan, you may be able to buy a stand-alone policy. This is sometimes called accident, sickness and unemployment (ASU) cover. You can usually buy this type of policy through an insurance broker or a company selling on the internet or over the phone.

Payment Protection Insurance has been heavily criticised by consumer watchdogs, it has been reported that millions ofUKcustomers may have been mis-sold the insurance policy with many now seeking PPI refunds.

Sally Bowyer, Managing Director of Brunel Franklin, stressed that vendors have a responsibility to ensure their products are appropriate for individual customers at the time of sale. “Unfortunately, however, the historic mis-sale of PPI policies was by no means unusual. Customers may wish to protect their loan repayments, but all too often in the past they were sold PPI products that were completely unsuitable for their needs.”

Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.