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Shop around for protection products, says Defaqto

18th March 2009 Print
Today's shocking unemployment figures show the continuing need for protection, says Defaqto.

Despite the waves of negative press that the Payment Protection Insurance (PPI) industry has seen in recent years, today's latest set of unemployment figures is likely to keep customer demand at a high level for the next couple of years. With 165,000 more people becoming unemployed in the past 3 months, and some industry commentators forecasting that another million jobs will be lost in the next 18 months, people will be rightly worried about what would happen with their mortgage if they lost their jobs.

Despite the latest government changes to the Support for Mortgage Interest (SMI) rules, there are likely to be many people who fall outside the eligibility criteria to receive this benefit should they lose their job.

"People who borrow money, or those who already have debts, are likely to be interested in purchasing some form of protection insurance in the next few years. But before they do so they should shop around to make sure they are getting the best deal" said Brian Brown, Head of Insight at Defaqto, the UK's leading financial research company.

"Customers might take little persuading to buy protection cover, but they should look before leaping in to buy cover," says Brown. "At the very least people should think about their priorities. For instance there is little point taking PPI cover for your credit card bill or a loan if you haven't first protected your mortgage."

Those customers who already have payment protection insurance, and who have read the large amount of negative press about it, should think very carefully about their position at the minute. While some people will have been mis-sold PPI, and might rightly seek to claim their premiums back from their lender, many will have valid policies which were sold properly and fairly. Before they cancel their cover they should be clear that they really mean to do so, and understand the consequences.

"It would be very sad to cancel your mortgage payment protection insurance, after being urged to do so by consumer groups and ambulance chasers, only to lose your job and then your house a few months later", said Brian Brown. "If you do think your current policy is too expensive, then at least shop around and see if you can find a better deal, rather than just cancelling it outright."