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Income Protection Insurance

Income protection insurance is really just a creative name for payment protection insurance and as we all know, this type of cover has been receiving quite a bit of attention as of late. Lenders are unhappy with new mandates concerning mis sold income protection insurance and this is not surprising at all. New restrictions and guidelines have been created and set forth by the FOS, the Financial Ombudsman Services, which mean that lenders cannot do what they have been doing for years. For at least the past decade lenders have been taking advantage of unsuspecting consumers by mis selling income protection insurance in a number of different ways. Because of this there have been thousands of claims for PPI refunds filed in the past year alone.

How the New Rules Will Affect Older Loans

Of everything lenders are most displeased with, the fact that the new guidelines will be used to judge loans that have been in place for years is perhaps the worst. This means that no matter how long a loan has been in place, if it can be proven that mis sold income protection insurance was attached to it, a PPI refund can be requested. Lenders will have to answer to much stricter penalties if they do not begin making borrowers aware of every aspect of income protection insurance. This means no more incorrectly or illegally sold policies and no more making extra money at the expense of consumers.

New Disclaimers Required

Whilst there was always a rule in place about selling income protection insurance and alerting consumers of all the facts, most lenders did not pay attention to the rule as there was no penalty involved. The worst thing that could happen was an unhappy borrower making a few waves and complaining. Now, there is a required disclaimer that all borrowers must be asked to sign proclaiming that they have read and fully understand all information pertaining to income protection insurance. You would think lenders would be happy with this as it would offer them an added bit of protection against false complaints. However, they are not happy because it means they cannot get away with the things they have for so long.

What the New Rules Do For Income Protection Insurance Refunds

In consideration of consumers, the new rules actually help get PPI refunds processed as the burden of proof falls on the lenders shoulders. This is because up until now there have been no signed documents to prove that the lender even explained the income protection insurance cover to the borrower. In addition, most of the older contracts were designed in such a way that it would be easy to fool a borrower into taking a loan protection or income protection policy out. This is because the old documents had a tick off box for opting out instead of an opt-in box which is really backwards according to the law. Today PPI claims are being won at a much better rate because of the new guidelines which have been imposed and the diligent efforts of claims management teams such as ours here at Belmont Thornton, Belmont Thornton.


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Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B16, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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