If I have taken out a Payment Protection Insurance Policy can I cancel it at any time?

The mis-selling of Payment Protection Insurance

The mis-selling of Payment Protection Insurance or PPI is something which is becoming increasingly common in the United Kingdom. Accordingly the Financial Services Authority (FSA) has put in place strict conditions which must be adhered to prior to the product being sold. An individual being sold Payment Protection Insurance must pay close attention as to whether the supplier is complying with these conditions. If they do not comply with these conditions the Payment Protection Insurance will have been mis-sold.

Furthermore, there are a variety of other factors which will be taken into account to understand whether a policy concerning Payment Protection Insurance has been mis-sold.

The cancellation of Payment Protection Insurance

If the supplier of the Payment Protection Insurance has complied with all the conditions set down by the Financial Services Authority (FSA) and has not mis-sold the insurance policy an individual will still be able to change their mind about the policy and cancel it when they deem it necessary to do so.

How can I cancel the Payment Protection Insurance policy?

If an individual has made a decision that they wish to cancel their Payment Protection Insurance policy then it is an easy process to go about cancelling it.

When an individual first takes out a Payment Protection Insurance policy they will have a legal right to cancel the policy within 14 – 30 days. The duration of the cancellation period will depend upon the particular terms of the policy that the individual has taken out.

However, an individual can still cancel the policy following the expiration of this initial period.

Cancellation of the policy

The cancellation of the policy will depend upon which type of Payment Protection policy had been taken out in the first place. The two main types of polices are as follows:

  • Monthly Payment Protection Insurance

  • Single Premium Payment Protection Insurance

Monthly Payment Protection Insurance

If an individual has taken out a monthly payment protection policy then cancellation of the policy can be made at any time during the period of the policy without the incurring of any further costs.

When cancelling a monthly policy an individual should also ensure that they cancel the direct debit payments from their bank.

Most Payment Insurance Protection policies attached to mortgages, credit cards or store cards will be on a monthly payment policy.

Single Premium Policy

If an individual has taken out a Payment Protection Policy alongside a loan or finance agreement then in most cases they will have a single premium policy meaning that they will have already paid for the insurance covering the whole of the term.

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For more information on:

  • A fair amount for the purpose of the refund
  • Can you simply divide the premium by the number of years the Payment Protection Insurance lasts for?
  • Is it good practice to ask the firm how the premium is calculated over the years of the policy?
  • What should I do if I don’t think that the refund is fair?
  • What happens if I am refused a refund?
  • If I have cancelled my Payment Protection Insurance is there any alternative insurance which I can get in place?