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PPI Alternatives: Income Protection Insurance

We’ve claimed back thousands of pounds for thousands of our customers and we’re continuing to do so. But we figured, why should we just claim the money back for our customers and leave it at that?

What is PPI?

Payment Protection Insurance is a product that was mis-sold with a number of different products such as mortgages, credit cards, loans etc. PPI was intended to cover any of your re-payments for your mortgage, loan, credit card, etc. should you find yourself in a position where you were unable to make the payment. For example, if you became ill or lost your job, you would have been covered by this insurance.

More often than not though, you would find that bank salesmen would mis-sell the product in order to hit sales targets and that is what has led the country to the state that it is in today with the PPI mis-selling scandal becoming the biggest mis-selling scandal in Britain.

Income Protection Insurance

This is a product that could be seen as an alternative to PPI. It is very similar but not exactly the same in that PPI will only cover the cost of the loan or credit that you have taken out, nothing more or nothing less.

Income protection insurance covers you for your whole salary as opposed to just the loan or amount of credit you have. Formerly known as permanent health insurance or PHI, long-term income protection insurance or IP, is an insurance policy that pays out should you not be able to work due to illness or injury.

IP also pays out until retirement, death or you make your return to work but this depends entirely on the type of policy you took out as there are cheaper, short term policies available. More often than not, IP doesn’t pay out if you’re made redundant but does offer “back to work” help if you’re off sick.

Insurance policies such as payment protection insurance and private medical insurance, which the general public was convinced it needed, were widely mis-sold by salespeople and not necessarily what the customer needed.

There’s only one insurance policy that all working adults should have in the United Kingdom and that is income protection insurance.

Also, they normally pay-out based on a percentage of your earnings of which the norm is 50 – 70% and these payments are always tax free. If you want any more information on income protection insurance, click this link.

Different Alternatives

There are a few other alternatives out there for you to look into. If you’re unsure where to look for them, it wouldn’t harm you to sit down and talk to your employer.

We say this because your employer may cover you if you are ever off sick or if you’re unable to work for one reason or another. You may not need to look into any additional cover if you’re already covered by your employer.

More alternatives are for you to start to look into what state benefits there are out there. These are the kinds of benefits that are paid for through national insurance contributions or NICs. If you’re an employee, more often than not, you’ll be entitled to SSP or statutory sick pay for up to 28 weeks which will be paid by your employer. This currently stands at £75.40 a week.

One other alternative for you to look into is employment and support allowance (ESA). If you’ve been paid your SSP, you will have come to the end of that after a maximum of 28 weeks. After this period, there’s then a 13 week period where you’ll be assessed to see if you qualify for the ESA.

If after this 13 week period it turns out you do qualify for ESA, you will then be notified of which type you qualify for. There are two types of ESA that you could qualify for. If you want to read more about any state benefits you could be entitled to, check out Direct Gov.

  • If you’re able to take in part some work related activity, you will be entitled to receive an ESA of £89.50 per week until you’re back in work again.
  • If, after your assessment it turns out that you’re not able to take part in any work related activity, you will be entitled to receive between £89.50 and £102.10 per week until you’re able to work again.

To Conclude…

If you think that you have been mis-sold payment protection insurance, you should get in touch with us and one of our claims experts will be on hand to assist you should you have any questions.

If you want to give us a call, you can find our phone number here. We also have a live chat facility on our website so if you’d prefer, one of our claims experts will be on hand to chat straight away.

PPI Alternatives

PPI Alternatives

About the author

Daniel Lee

Company Director

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