Payment Protection Insurance Glossary

Payment Protection Insurance
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A

Accident
An undesirable or unhappy event or circumstance that is unforeseen.
APR
Annual Percentage Rate
A.S.U
Stands for Accident, Sickness and Unemployment

B

Back complaints
For the purposes of Payment Protection Insurance, in some policies back complaints are excluded. If this is something you suffer with it is advisable to check the policy exclusions.

C

Carer cover
Some Payment protection policies will offer protection should you have to leave work to become a carer for another.
Catalogue payment
Payments due as a result of goods ordered from a catalogue
Conditions
Rules or requirements that must be kept by the insurer and the insured.
Comparison
The process of examining two or more policies in order to discover similarities and differences between them
Credit card
A card issued by a bank or building society that allows somebody to purchase goods and services and pay for them later, often with interest.
Credit agreement
A legal contract in which a bank arranges to loan a customer a certain amount of money for a specified amount of time. The credit agreement outlines all the rules and regulations associated with the contract. This includes the interest that must be paid on the loan.
Critical illness
Insurance coverage that provides a lump sum payment upon diagnosis of a covered critical illness.

D

Disability
An inability to perform some or all of the tasks of daily life, an eventuality that may be covered in certain Payment Protection Insurance Policies

E

Eligibility
Sometimes referred to as criteria, these are usually a list of things that a client has to meet before being able to enter into an agreement for payment protection insurance.
Exclusions
These are conditions or states that are excluded from the policies offering

F

Financial Ombudsman
The Financial Ombudsmen acts as a independent watchdog over financial service companies and their actions for the consumer and is used as an independent in the settling of complaints.
FSA
The FSA - Financial Services Authority is the regulator of all providers of financial services in the UK

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H

Hospitalisation
Should one become hospitalised through accident or sickness, some payment protection policies will payout after a certain period of time.

I

Insurance brokers
An insurance broker is a person or firm who acts as an intermediary between a client who requires insurance and companies who provide that, their advice being based on the needs of the client.
Interest rate
Usually expressed as a percentage rate of a sum of money, interest is charged for the use of that money or service.
Income protection
Insurance cover available in some payment protection insurance policies which protects against loss or reduction in income.

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L

Legal right
A right based in law set out by contract
Limitations
Limitation is the extent to which a condition set out in contract will run, for example a period of time.
Life
Life cover is a service a Payment Protection Policy may offer. It is Protection against the death of an individual in the form of payment to a beneficiary
Loans
A loan is a type of debt

M

Maternity leave
Parental leave is an employee benefit that provides paid or unpaid time off work to care for a child or make arrangements for the child's welfare, again included in some payment protection policies.
Mis-Selling or Mis-Sold PPI
Mis-Selling Payment Protection Insurance or being Mis-Sold PPI arises when a financial services company sells a financial product, for example; a mortgage, car loan, hire purchase or credit card without taking the proper steps to adequately assess their client's suitability. It can also occur if they implied or stated that their client was required to take out their payment protection insurance policy to qualify for the financial product they were selling or as an incentive to assist with completion of a loan application. In some cases, they may have included additional Payment Protection Insurance  in the cost of the loan without informing their client.
Mortgages
Some payment protection policies will cover mortgage payments for a set period of time in the event of accident, sickness, unemployment and other factors which may affect ones income.

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P

Paternity
Parental leave is an employee benefit that provides paid or unpaid time off work to care for a child or make arrangements for the child's welfare, again included in some payment protection policies.
Payment protection insurance (PPI)
A type of insurance sold alongside unsecured loans to cover monthly repayments in the case of unemployment, accident, sickness or death.
Payout
Payout refers to the funds that are paid out as a result of a successful claim against the Payment Protection Insurance policy
Payment cover
Payment cover refers to a type of protection offered by some policies for payments due
Pre existing medical condition
A medical condition that existed and a client was aware of, prior to taking out the Payment Protection Insurance policy.
Policy
A policy is a formal written contract of the conditions of the insurance policy
Premium
The premium is the payment for insurance.

Q

Quote
A quote refers to the act of giving somebody an estimation of the cost of a good or service.

R

Redundancy
Redundancy refers to the act of dismissal from employment because the job or worker has been deemed unnecessary.
Regulation
To regulate something is to organise or control an activity by making it subject to rules.

S

Sickness
An illness or disease that has been unforeseen, and affects the ability to earn income and the ability to make payments as they fall due.
Store card
A form of credit given by retail stores.
Stress
Stress is a mental, emotional or physical strain which can be caused by various factors.
Standalone policies
A standalone policy is one which has no dependants, and covers one area specifically such as critical illness.

T

Terms and conditions
General and special requirements that form a part of the agreement to which both parties must abide

U

Unemployment
The state of being out of work, through no fault of ones own, an eventuality included in many Payment Protection Insurance policies
Unsecured loans
A loan that is not secured upon an asset such as property.

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