Insurance most of the time makes it complicated for file or make a claim. Often, insurance claims involve a considerable amount of money and insurance companies want to make sure they are paying the right amount to the right beneficiaries. A case for a PPI Claim should not be as complicated because the insurance is on the amount of loan, right?
The problem crops up when it has to be the loan borrower that would file a claim to pay off the lending institution. In truth and in fact, the PPI came about because of the loan and has nothing really much to do on vested interest of the borrower to claim it for himself or herself.
Loan repayment
If anyone could just get away from paying off a loan, they would do just that. The PPI is an assurance for a financial firm that the loan would be paid under any of the agreed circumstances that a borrower becomes incapacitated to settle the obligation. True, the borrower pays the premium but the main beneficiary is the financial institution. Before the repayment insurance came out, financial firms could not collect if the borrower is deceased.
For all intents and purposes, it is supposed to be the lender to file a PPI Claim in the event the borrower dies or has no longer any means to pay off the loan.
What if loan is already partially paid?
Probably the best thing a PPI insurer can do if a loan has been partially paid and pays off only a small outstanding balance, is to refund a proportionate amount of the premium to another beneficiary or next of kin of the borrower. On the other hand, if the financial institution claims the entire loan amount insured, the lender should refund the partial payments made by the borrower to other beneficiaries.
PPI has beneficiaries other than the lender who is the main beneficiary for which the insurance was taken out. It will be better for the financial institution to file the claim to satisfy the remaining loan obligation then return to the beneficiaries part of the loan that was already paid by the borrower. Click here to know more about this