How to Find the Cheapest PPI

Payment Protection Insurance (PPI), which covers your debt repayments for a while should you be unable to make them yourself, is offered by most credit providers with the products they offer. Their prices may not be competitive, though, and it’s usually best to shop around to find the best deal.

Instructions

Difficulty: Moderate

1. Decide what kind of coverage you need. A fully comprehensive PPI policy covers your payments in the case of accident, sickness or unemployment. You may want coverage for only one or two of these conditions, however. If so, you can expect it to cost less.
2. Visit the Money Supermarket price comparison website (see Resources). It’s a great way to check the prices from a large number of providers quickly. Be aware, though, that the process of comparing prices across a diverse range of products also necessarily involves a degree of simplification. In some cases, if you approach a company whose price you saw quoted on the site, you may find yourself being asked a few extra questions–-and your answers to those questions might result in a different price than the one you first saw on the website.
3. Get quotes. You’ll be asked to enter variables such as your age, your monthly payment amounts and your monthly income.
4. Read the details of each insurance policy carefully. PPI is not some generic product where one policy is just as good as another. There are serious differences between them and those differences matter. Be especially careful about reading the exclusions--the circumstances in which your payments will not be covered.

Tips & Warnings

• If you’ve already taken out Payment Protection Insurance on borrowing you’ve made, and later discover that you got a bad deal, don’t despair--you may be able to cancel the PPI separately while keeping the main borrowing arrangement intact. More and more providers are offering this degree of flexibility now. Not all do, however, so you’ll need to check and, in some cases, you’ll pay a cancellation fee.
• One unusual term you may need to understand a PPI contract fully is “excess”. Excess means the period of time you need to wait before payment cover begins after your circumstances chance in such a way as to activate the policy. Usually this is around 1 or 2 months. Some polices offer “Back to Day One” cover, though.