PPI or LPI Insurance

[theshedman]

Hi, can anyone tell me if this insurance is right for me. I am disabled so cannot work and my wife is not working as she looks after me. We took out a loan and were told to take out LPI with it. We were told that we may need it if my wife started working and then for some reason she had to stop, was sick long term or if one of us died. If one only one of us dies does that mean the loan is finished or would the other have to keep paying it as it is unclear to me. Hope that someone is able to help. Thanks

[theshedman]

Hi, forgot to mention the loan was taken out in both our names.

[EverClean]

I don't think that there's a difference between LPI and PPI - in my knowledge. PPI/LPI is almost useless to you, as you "cannot work." In your wife's case it would probably be wise to take out PPI when she starts work - it is at this point that she has an insurable need. I don't think you can take out a PPI policy unless in work anyway, with most insurers. I also don't think that PPI will cover you if one of you died. It is set up as a policy that will cover your loan payments for a short term (usually 1 year) if you are unable to work through accident, sikness or involuntary unemployment. If the policy is set up in joint names then it will usually cover HALF the monthly payment each.

I'd suggest you read the small print or post a link to the policy summary for the insurer and we can have a look at it.

[Ethel]

How much is the loan, how long is it for and how much is the PPI?

I really cannot see how PPI would benefit you - you have to be working to get any benefit at all, and then they can be very reluctant to pay. You can be very sure they will use existing health problems as a reason not to pay out.

LPI - do you mean some form of life insurance that pays the debt on death?

Look carefully at how much this insurance costs - they are usually very expensive when compared to the amount of the loan. It is pointless having a loan for �5000 and then paying �2000 in insurance, for example.

You do not need any form of income protection as neither of you have a job to lose. Nor do you need critical illness cover - you will not get less money if your wife becomes ill.

How old are you both? Is your illness likely to cause your death during the term of the loan?

Without knowing all the facts I would say you should not be paying for any insurance.

[theshedman]

Hi, thanks for the answers. I have looked into it a bit more now and am pretty sure that I was miss sold the policy so I will be having a little chat with my bank about it. I also have PPI on my credit card which I now think is a waste of time. Why do banks sell things they know are a waste of money to you. Must be profits or promotion lol.

Anyway thanks again for the replies.