To support this, it has been reported that around 90% of all missold PPI claims submitted to the Financial Ombudsman are being upheld in favour of the client and massive compensation claims are being awarded against UK lenders.

The payment protection insurance industry is estimated to be valued in excess of £6 billion to the UK lending industry and if 90% of these claims have been mis-sold, then the reclaim industry has a massive task ahead of it.

Well what is all this about?

The idea of arranging an insurance policy to protect individuals against financial hardship in the event of losing their job through redundancy, being off work through sickness and/or accident is good, as the insurance policy would pay out a monthly benefit to an individual to help them to meet their loan repayments.... It all sounds good so far!

There are a number of factors and clients circumstances that should be taken into consideration by advisers when considering insuring a client for the repayment of a loan and I list these for consideration.

1) Is there a need to protect the individual/s? 
2) Do they already have protection in place? 
3) Does the customer qualify for the protection? 
4) What term will the protection last in comparison with the loan term? 
5) Is the protection suitable? 
6) Are there any pre-existing condition clauses? 
7) If yes, have these been explained? 
8) Have comparisons of similar products been made? 
9) Have the terms and conditions of the policy been fully explained?

Unfortunately, most of the payment protection insurance (PPI) policies sold by lenders (to protect loans) have been sold as a single premium policy. This effectively means placing a lump sum insurance premium on top of a loan and thereby increasing the loan amount substantially. It has been reported that this insurance premium can increase the loan amount by as much as 40% in some instances.