PPI Cover – Typical Exclusions
Within every PPI contract there are a number of exclusions, however not every exclusion is part of every PPI contract. In order to find out which exclusions apply to your particular contract you will need to read the policy conditions given to you.
The exclusions included in PPI contracts are added to prevent policyholders from claiming benefits and commonly include number of hours worked, employment status and pre-existing medical conditions. It is possible that other factors may make you ineligible, such as your place of residence.
Students and PPI Cover
Research has shown that more and more students are working in order to fund their degree, with the most recent figures suggesting that as many as 59 per cent of students are working while studying.
An NUS Services survey, which asked 2,128 students, found that 45 per cent of students have a part-time job. The survey also found that a third of all students are working during term time, fitting in shifts around their lectures and study time.
38 per cent of these working students say they do so to save money for their future, while 35 per cent work to avoid being in debt. However, over half say that they’re working in order to increase the chances of employment post-graduation.
Usually students are excluded from claiming as part of a PPI policy, as they tend not to be in full-time work. PPI doesn’t usually cover anyone who works fewer than 16 hours per week, and student workers usually fall into this bracket.
PPI Policy Cover for Casual workers and zero-hour contracts
According to the Chartered Institute of Personnel and Development, there are over one million people on zero-hour contracts, and 20 per cent of employers have at least one employee on a zero-hour contract.
A third of organisations in the voluntary sector make use of zero-hour contracts, as do around 25 per cent of public sector employers and 17 per cent of companies in the private sector.
Figures provided by the Office for National Statistics (ONS) state that around 2 percent of working people in the UK are on zero-hour contracts.
These people are classed as casual workers and are therefore unable to claim under PPI policies.
Self employed and PPI
More people than ever are self-employed according to ONS figures, with construction work, carpentry and taxi-driving among the most common jobs held by the self-employed.
In the UK there is an estimated 4.6 million people who class themselves as self-employed, with this representing 15 percent of the total workforce. This shows the growth in self-employment when compared to the 13 percent of those classed as self-employed in 2008 and the 8.7 percent in 1975.
Self-employed people may be unable to claim under PPI policies and those that do claim risk further financial difficulties by doing so.
Part-time workers and PPI
ONS figures show that there are over 8 million part-time workers in the UK. There is no definition of the number of hours that constitute part-time work, however, full-time work is usually classed as being 35 or more hours per week.
Legally, part-time workers cannot be treated differently to full-time workers and should receive the same treatment on matters including:
- pay rates
- pension opportunities and benefits
- training and career development
- selection for promotion and transfer, or for redundancy
- opportunities for career breaks
It is permissible that certain benefits are given ‘pro rata’ or in direct correlation to the number of hours worked. One example of this is in the form of bonuses, as if someone working full-time were given a bonus of £1,000 and works twice as many hours as a part-time worker then the part-time worker should get a bonus amounting to £500.
Protective legislation does not apply to insurance policies, however, and part-time workers may be excluded from claiming on policies if they work fewer than a specified number of hours per week.
Exclusion – joint borrowers and PPI
One of the main considerations made by lenders as part of the application is joint borrowing. Logically, joint borrowers will have a higher income than a lone applicant, particularly if both individuals are in paid employment.
As a result, lenders tend to be more willing to offer larger amounts and consider the application to have a lower risk factor. Many joint borrowers are under the impression that both participants are covered by a PPI policy, however, it is usually only the first named applicant that is protected should a claim be made.
Exclusion – existing medical conditions and PPI
It is possible that you may be excluded from claiming on PPI due to pre-existing medical conditions, such as back pain.
In May 2012, the British Chiropractic Association revealed that “the greatest number of working days (34.4 million) were lost due to musculoskeletal conditions such as back pain, neck pain, and upper limb problems”.
Exclusion – stress and PPI
It is perfectly natural for everyone to feel as though they’re stressed occasionally, but feeling that way all the time is an indicator that you may be suffering from severe stress.
After performing a study of 10,000 people, Bupa discovered that 1 in 4 people feel stressed constantly and 44 percent of British people suffer from stress on a regular basis. Of the 44 percent that said they were regularly stressed 28 percent had been suffering for over a year, which amounts to one million people.
If you suffer from stress then it is possible that you may be excluded from claiming on PPI policies.
Exclusion – mental health problems and PPI
There have been no significant changes in the number of people suffering from mental health problems in recent years, but worrying about jobs and money often make it considerably harder for people to cope.
Figures from Mind, the leading authority on mental health in the UK, say that around 1 in 4 people will suffer from mental health problems each year. Many PPI policies exclude people based on mental health conditions, particularly if they are chronic or long-term.
Exclusion – age limit and PPI
Often PPI policies have an upper age limit, which excludes policyholders from claiming when hit.
It can take a lot of time and effort to figure out which exclusions are relevant to your policies, but it is vital for us to be able to make a complaint as it enables us to pinpoint specific factors to make a better case.