The World Health Organisation this week warned that four in 10 Britons could fall victim to swine flu if the outbreak becomes pandemic. Although it is early days and there are hopes the virus will be contained, Payment Protection Insurance campaigner Sara-Ann Burgess is concerned insurers will not cover this condition and reject claims from people forced to extend their sick leave because of it.

She comments: “PPI gives people peace of mind that their bills will be paid for up to a year if they temporarily lose an income because of accident, sickness or unemployment. However, it’s widely recognised that insurers are keen to wriggle out of their obligations citing small print and exclusions and I fear many will not include swine flu as a condition because it’s such a new virus.”

Medical experts say the virus has symptoms similar to seasonal flu and suggest sufferers should recover within a week. Sara-Ann counters that if this strain of the H1N1 virus, normally associated with pigs and now transferring to humans, isn’t so debilitating, why have 152 people already died in Mexico with thousands laid low. She says: “I suspect many will indeed recover within a week, but it’s striking down younger people so there could be cases where sufferers need to take more time off work which could result in financial difficulties if they are moved onto Statutory Sick Pay.

“I therefore advise policyholders to check whether their insurer will pay their bills should they fall victim to this virus – it’ll be one less thing to worry about in the future. If their provider doesn’t cover swine flu, move to a provider that does, it will allay any fears and could save hundreds of pounds in the process.”

Two cases of swine flu were confirmed in Britain this week and suspected infections are beginning to emerge.

Scottish Health Secretary Nicola Sturgeon says infections in the wider community can’t be ruled out and medics at Imperial College, London, predict that if an outbreak does occur, it’s likely to flare up in the autumn, in line with seasonal flu. The WHO confirms up to 40% of the population could be infected in the next six months which is why Sara-Ann is also urging insurers to do the right thing and cover this condition now.

Standalone PPI provider, British Insurance has confirmed it will honour claims from swine flu sufferers and is well-known for offering policies that are 10 x cheaper for Loan Protection, 4 x for Mortgage and 5 x for Income. Sara-Ann hopes others will follow its example.

She concludes: “Any decent PPI insurer will make cash payments to claimants as soon as they are put onto SSP – otherwise this virus will not only knock people for six physically, but it will do the same to their finances.”

Payment Protection Insurance lobbyist Sara-Ann Burgess says Chancellor Alistair Darling missed a trick last week when he announced a series of measures to kick-start the UK’s economy. She comments: “Instead of undertaking an unprecedented borrowing strategy to boost the markets and lenders’ confidence to extend credit again, the Chancellor should have recommended to make PPI compulsory with all mortgages.”

This radical move, in Sara-Ann’s opinion, will do more to stimulate the housing market in particular, than increasing public borrowing to £175 billion and plunging UK PLC further into debt. She explains: “If PPI was bolted on to every mortgage offer, premiums would dramatically reduce because of the volume of policies - it’s all about economies of scale. Lower premiums coupled with a Government subsidy for every borrower would make PPI easily affordable for all. If the Chancellor can do this for car owners he should be doing it for those taking on larger financial commitments.”

From next month, motorists will get a £2,000 discount on new cars if they trade in vehicles that are older than 10 years – the Government will give £1,000 and the other half would come from the motor industry.

Sara-Ann counters: “£1,000 for one person equates to five people having PPI cover paid for over a year* – and that’s basing it on a premium offered by an independent provider today, before any lender discounts or Government subsidies are taken into account.”

She concedes that all sectors need a boost but as a withdrawal of credit is contributing to the fastest shrinking economy since World War 2, suggests this move would help to stabilise the financial services sector by instilling greater confidence in both lender and borrower. “Lenders will have a greater appetite to extend credit if they know the monthly payments will still be met if the borrower loses an income.

“Whilst I applaud any measures that help homeowners who are struggling to meet their mortgage commitments - such as an extension of the Income Support for Mortgage Interest scheme - wouldn’t it be better to put in place a mechanism that prevents homeowners getting into difficulty in the first place? Equally, the Government-introduced Homeowners Mortgage Support Scheme only serves to defer payments and so build up the overall level of debt.”

PPI pays out a pre-determined monthly amount, should a salary go because of redundancy, accident or sickness. Given unemployment is the key trigger for the majority of defaulted loan payments and the Office of National Statistics reports 2.1million were without jobs between December and February, Sara-Ann says the introduction of compulsory PPI policies is socially responsible.

She continues: “Ministers should only be encouraging people to spend more money if they have the means to protect their loan repayments should they lose an income. It’s complete folly to use taxpayers’ money to build up lenders’ coffers so they can make more mortgages available to people who do not have the means to meet their commitments should they lose their job.”

Sara-Ann has campaigned for months for the Government to move PPI higher up its agenda, mindful that it can help reduce the number of people in mortgage arrears and those facing repossession.

She concludes: “The Government can find billions to bail out the banks and building societies and announce measures to increase lending, but is unable to directly support homeowners. Reducing the cost of PPI and making it widely accessible to all is far more effective than measures that do not tackle the root cause of the problem - it’s like shutting the stable door after the horse has bolted.

PPI will bail out consumers before they spiral into debt, not after. A wider provision of policies will better stimulate the economy and if my advice is ignored, I fear the predictions of the Liberal democrats will come true – years of unemployment and decades of debt.”

* Based on a policy paying £500 a month. British Insurance charges £3.40 per £100 of benefit for unemployment cover - £3.40 x 5 = £17 monthly premium. £17 x 52 = £204 per year.

As the number of people opting to live in rented accommodation continues to increase, Payment Protection Insurance lobbyist Sara-Ann Burgess is calling upon tenants to ensure they have the means to pay bills should they lose their salary through accident, sickness or unemployment.

Sara-Ann is reminding tenants of the need to have a back-up plan - either in the form of savings or via PPI - to meet their financial commitments, following suggestions from the Council of Mortgage Lenders that people who rent are more susceptible to debt than those with mortgages. Its rationale is that borrowers who succumb to financial difficulties will have access to drawdown facilities on their mortgage, can refinance, borrow more or sell their property. Those renting, have none of these options.

She comments: “We’re hearing a lot about Government and lender measures to help people with mortgages keep their homes, but the same level of attention doesn’t appear to be given to tenants. They have the same financial commitments as borrowers and with the recent interest rate cuts, are probably paying more in rent per month than those with mortgages.

“Savings are diminishing in order to meet increasing costs and as renters will not be able to rely on increased credit when times get tough, PPI will be a valuable source of income if a salary goes. It’s similar to having access to a credit provider, but the beauty is you don’t have to pay the money back. The outlay is in the premiums paid beforehand and the return is the payment of pre-determined monthly benefits for up to a year.”

According to the Survey of English Housing, there were 3 million private rental households at the end of last year, up from 2.7million in 2007, 3.8 million social renters and 14.6million owner/occupiers. Those privately renting or in socially rented accommodation now account for nearly 32% of UK households.

Sara-Ann continues: “Around one in three households could benefit from PPI, but I suspect they feel the cover is only applicable to those with mortgages and loans. However, everyone has to pay a plethora of bills to keep a household running so there’s no reason why renters shouldn’t use this cover to prevent them falling into greater debt during times of hardship.”

When scrutinising household moves, the Survey of English Housing says 47% of all newly formed households are in the private rental sector, ahead of 34% owner/occupiers and 20% social renting.

Sara-Ann concludes; “Tenants may not feel the need to purchase PPI in the belief that the financial consequences will not be so severe if they fall behind with their rent - however, I beg to differ. No one is immune from financial difficulties – whether renting or paying a mortgage – you can still lose your home and the impact on a family could be severe. I appreciate household finances will be tight, but an outlay now could prevent further hardship in the future.”

Independent provider, British Insurance, last year launched PPI policies for people renting properties and those in shared ownership schemes. The firm was applauded by the National Landlords Association for allowing tenants to access the same protection products as owners/occupiers.

The Policy covers up to £1500 per month rental payments or 50% gross monthly income and starts at £1.90 per month per £100 of monthly benefit. It offers back to day one payouts and one set premium rate, a choice of cover options and caters for people who voluntarily leave work to become carers for up to one year.
British Insurance’s policies also provide free Health, Employment and Legal Protector cover, 24/7 health and legal helpline services, plus Legal Expenses in relation to employment and bodily injury disputes.

Customers can get information on general health and non-diagnostic matters such as allergies, side effects of drugs and Health Service waiting lists and there’s a free back to work service with self help guides, access to a specialist website, job vacancy database and telephone advice via employment counsellors.

As unemployment figures continue to rise, it’s no surprise to find Payment Protection Insurance providers extolling the benefits of their redundancy cover. However PPI lobbyist Sara-Ann Burgess believes insurers are overlooking a second factor – sickness – when discussing the key contributor to a lost income and household indebtedness.

According to the Council of Mortgage Lenders, households experiencing payment difficulties are just as closely associated with sickness as redundancy. It recently commented on households’ ability to meet their financial commitments and what ‘tips them over the edge’.

The CML suggests higher food and fuel costs in 2008 were the initial triggers behind indebtedness, coupled with unexpected spending on major household items or car repairs. Official figures show the cost of food alone rose by 11.3% in the year to February 09 and vegetables increased by 18.6%.

In February this year, YouGov reported a quarter of all households – around six million – were struggling to keep up with their bills or were falling behind with payments. The CML says, despite interest rate cuts, the four main reasons for indebtedness are; increase in spending, loss of income, change of household circumstances and withdrawal of credit facility.

Sara-Ann comments: “Redundancy is cited as the main cause of a lost salary, and in this current climate it’s easy to see why, but sickness is having an equally devastating affect on household finances and is just as much to blame for indebtedness. This comes as no surprise, given the escalating stress levels amongst those who are still employed and anxious about their jobs.”

Redundancies often result in an increased workload for those left behind which in turn can exacerbate workers’ stress and anxiety levels. Sara-Ann continues: “Those still in a job not only feel more pressure to perform well, but they may be feeling guilty at so many of their colleagues going. It’s been widely reported that the recession is bad for your health, which is why insurers must include sickness as well as redundancy in the equation when talking about PPI as a mechanism to pay bills should an income be interrupted.”

The International Stress Management Association says over 530,000 people yearly seek medical advice for that they believe to be work-related stress whilst a 2007 Psychosocial Working Conditions Survey showed that 13.6% of all working individuals thought their job was very or extremely stressful. A Stress and Health at Work study commissioned by the Health & Safety Executive revealed 17.1% of British workers in 2008 said their jobs were extremely or very stressful, compared to 12% in 2006.

As well as 40,000 repossessions last year, there were 106,544 individual insolvencies, and in Sara-Ann’s view insurers have a duty to help halt the country’s downward debt spiral: “I suspect a fair few of these statistics are due to loss of income because of sickness. Some will have had PPI, but found their claims were rejected. It’s well-known that insurers use their small print and exclusions to avoid paying out on stress-related conditions, but these people need insurers’ help as much as those facing redundancy.”

Independent provider, British Insurance, includes partial cover on pre-existing conditions, plus stress and back-related conditions (often excluded on other policies).

Sara-Ann concludes: “It’s obvious sickness and redundancy will be key contributors to financial difficulties so it’s equally obvious we should make reference to them when advising people of the need to put in place a financial prop via PPI.”

PPI pays claimants a monthly sum if an income is interrupted which can cover a specified financial commitment such as a mortgage or loan, or a variety of household bills, dependent on the premium paid and amount of benefit required. British Insurance charges £3.90 per £100 of benefit for those wanting accident, sickness and unemployment cover, £1.90 for accident and sickness and £3.40 for unemployment only.

The firm, for the third year running, was recently named Best Mortgage Payment Protection Insurance Provider and for the second year, Best Overall Insurance Provider, by readers of Mortgage Introducer magazine.

The thought of paying out now to make savings in the future may not sit well with millions of households struggling to make ends meet, but if people do not adopt this philosophy and invest in policies that will prop them up financially should they lose their job, then the consequences could be severe.

This advice comes from Payment Protection Insurance lobbyist Sara-Ann Burgess who is fearful that as redundancies continue to grow and more households lose an income, fewer people will have a financial safety net to fall back on. Surveys appear to support this view and with finances becoming even more stretched, due to rising living costs and ‘frozen’ wages, those who will benefit most from PPI are overlooking this cover, exposing themselves to future losses and increased debt.

She says: “It’s a downward spiral, in the short-term, people feel they can’t afford to pay premiums for something that will help them if their future circumstances change, but if they do pay a little now and redundancy does occur, they will end up with less debt in the long run.

“I don’t want to add to the despondent climate we’re already in, but people must take a reality check. They need to consider the likelihood of their employer making redundancy announcements, check the amount of savings they have to fall back on and tot up existing bill commitments to see how long they can survive without a salary. I suspect many people have already done this and feel they can continue to meet bills without an income, but what about those with no contingency sums? They must ensure they have the means to pay their household bills or sink deeper into debt and possibly risk losing their home or liberty, particularly if they cannot meet their council tax costs.”

PPI makes monthly payments to claimants who lose an income due to accident, sickness or unemployment for up to a year. Premiums are calculated per £100 of benefit and tend to be cheaper via independent firms who are not linked to the provision of credit. Standalone firm, British Insurance, for example, charges £3.40 per £100 of benefit for unemployment cover, meaning a monthly premium of £17 will generate a £500 return. This over a year equals £6000 to cover bills.

Recent research from credit information provider Equifax suggests there’s a greater need than ever for households to spend a little on PPI as fewer people have access to contingency funds and many rely on plastic to meet their debts. Its latest survey shows that 46% aren’t saving anything from their monthly income - a 14% increase year on year – and 55% have seen their disposable income decrease by 20% or more in 2009. In 2008 it was 35%. When it comes to credit card debt, 40% of respondents owe over £5000 on their plastic.

To compound this, recent YouGov research reveals many are underestimating the extent of their financial problems. Its Debt Track Survey monitors the financial situation of 3000 people and at the end of 2008, found 30% described themselves as constantly struggling financially.

Only 4% believed they were falling behind with their commitments, but when questioned further it was found 9% were behind paying specific bills such as credit cards, utility bills and personal loans. Of those who said they were constantly struggling, 47% admitted to having no savings and only one in six said they had any form of insurance to pay their bills or mortgage if they lost their job or fell ill.

Sara-Ann concludes: “Clearly households are opting to ‘wing it’ and hope for the best if they lose an income. But this needn’t be the case - for those who feel they cannot spare any extra cash to buy PPI cover, it could be a case of cutting back on a luxury to pay for a necessity. A small outlay now could shore up finances in the future - this policy will deliver rich dividends if redundancy strikes.”

The insurance industry prides itself on giving help to customers when and there they need it most, however this ethos doesn’t appear to apply to firms operating in the Payment Protection Insurance sector who are either refusing to provide unemployment-only cover or have increased their premiums by up to 40%.

PPI lobbyist Sara-Ann Burgess says insurers are acting immorally and is calling upon them to stop exploiting vulnerable customers. She comments: “You’d think this was an April Fools day joke – consumers are acting responsibly by looking for ways to ensure their bills are paid should they lose their job and insurers are unwilling to provide cover. They’re either turning their backs on people who really need their support or if they do decide to offer PPI, it’s at vastly inflated premiums to ensure profits remain buoyant. If profiteering at the expense of people’s insecurities isn’t exploitation then I don’t know what is!”

Also known as Accident, Sickness and Unemployment cover, PPI pays a pre-agreed monthly amount to the claimant for up to a year in the event of a salary being lost. Dependent on the type of policy purchased, cash payments can either go straight to a bank or building society account to cover a wide variety of bills or direct to a lender to meet mortgage or loan repayments.

As unemployment rises, more claims are being made and it is this trend that’s prompted insurers to take action. According to the Association of British Insurers, 20,063 PPI unemployment claims were received by the end of last year – an increase of 200% on the previous year. Sara-Ann’s outburst follows a report that Norwich Union has an unofficial ‘blacklist’ detailing industries and companies it will no longer provide PPI cover for.

She says: “This is appalling, unemployment exclusions should only apply to people whose employers have announced any job losses, whether relevant to them or not, department or company restructures or mergers with another company. If you are not aware of any impending unemployment announcements then you should be able to buy cover, whatever sector you’re in. I believe NU has the financial services sector on its list, so let’s hope its own staff aren’t looking for cover. I believe insurers are beginning to make up their own rules in a bid to make greater profits.”

It was recently announced that Cardiff Pinnacle, Hitachi, Norwich Union and Paymentshield hiked up their costs by up to 40%. Sara-Ann continues: “On the one hand insurers are encouraging consumers to take control of their finances and put in place a financial safety net should redundancy occur and on the other, they’re making it near impossible for them to afford to do so. What hypocrites!”

Media reports put the typical cost of protecting £750 worth of mortgage repayments at £50 per month, as opposed to £37.50 before the hike. However Sara-Ann suggests there are independent PPI providers who continue to act in the best interests of consumers by refusing to increase their premiums and offering an unemployment-only option: “British Insurance charges £3.40 per £100 of benefit for unemployment cover, equating to £25.50 per month for a £750 payout – around half the price of others.”

Insurers will argue they need to increase premiums to ensure they can meet the increasing volume of claims, but Sara-Ann concludes that the PPI sector has enjoyed enormous profit levels over the years and it’s time firms continued providing cover and used money from their coffers to pay impending PPI claims: “Around five years ago the market was said to be worth around £5.5billion - the majority of which was creamed off in profits.

“Rather than penalise people and withdraw support or increase costs at a time when this cover could make the difference between keeping and losing your home, insurers should be doing the right thing and responding to customers’ needs. Firms that are exploiting this current economic climate are showing their true colours and yet again the actions of a few are tarnishing the reputation of all.”