Unit 3

Question 1

What does PPI stand for?

Answer 1

Payment protection insurance.

Question 2

What is payment protection insurance?

Answer 2

Payment protection insurance (PPI) is a form of income protection that covers monthly debt repayments if you’re unable to work. Typically, you can protect up to 70% of your annual income and a PPI policy will provide pay-outs for up to 12 months if your claim is successful.

Question 3

How long will PPI policies play out for?

Answer 3

A fixed period of time such as 12 months.

Question 4

What is a whole of life insurance policy?

Answer 4

When a firm promises to pay out a fixed sum when you die.

Question 5

What is a term insurance policy?`

Answer 5

An insurance policy that expires after a set term. They are generally cheaper, but in some circumstances worthless. They are often used to ensure that debt is not inherited.

Question 6

What is the Financial Ombudsman Service (FOS)?

Answer 6

A government run service, intended to settle consumer complaints impartially between bank and customer. They are essentially an unbiased moderator.