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Life insurance better than PPI

Date: Wed, 08 Feb 2006

Consumers are being advised to consider life insurance cover rather than pay for expensive payment protection insurance (PPI).

A study by the financial research company Defaqto has concluded that UK consumers could be wasting around £350 million each year on worthless PPI cover. The insurance is designed to cover the cost of repayments if the borrower becomes unemployed or ill.

However, Defaqto discovered that many policies refuse to pay out as they are often mis-sold by lenders. The company is hoping its report will encourage greater transparency within the PPI sector and encourage borrowers to seek alterative cover such as life insurance.

Report author Brian Brown, associate director at Defaqto, said: "The current situation is clearly not working as well as it could and is ready for an overhaul."

"Insurers should conduct a proper customer demands and needs analysis before making a recommendation to take out this insurance. They should also spend more time explaining to the customer what information is required," he added.


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Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.