PPI Exclusions – typical examples
There are numerous exclusions applied within PPI contracts although not every clause mentioned in this section will apply automatically to your policy. You need to read the policy conditions to determine which exclusions, if any, were included. These clauses are designed to prevent policyholders from claiming benefits. Common principles include the number of hours you work, pre-existing medical conditions, your age and employment status. Other factors, such as your place of residence, can make you ineligible for any financial benefit.
Exclusion – students and higher education
New research shows that an increasing number of students now work to fund their studies, with the number of working students currently standing at 59%.
A survey of 2,128 students, conducted by NUS Services, found that nearly half of students, 45%, have a part-time job, including a third of students now working part-time during term time.
A sensible 38% say they’re doing it to save for the future and 35% to avoid being in debt. But many also work to boost their employment prospects after university, with over half, 53%, saying this is a motivating factor.
Students and people attending higher education are often excluded from claiming benefits under a Payment Protection Insurance policy. This is because, as a general rule, they are not in full-time employment. Individuals who work less than sixteen hours per week are not usually covered for PPI – people attending places of higher education are prime examples.
According to the Higher Education Statistics Agency (August 2014) there was a total of 2,340,275 students attending a UK higher education institution during 2012-13.
Exclusion – casual workers
A survey of employers by the Chartered Institute of Personnel and Development put the number of zero-hours contracts at more than one million, with one in five employers having at least one employee on zero-hours.
It found that a third of voluntary sector organisations used zero-hours contracts, along with a quarter of public sector employers and 17% of private sector firms.
Figures from the Office for National Statistics (ONS), based on a survey of workers, found 583,000 people were on zero-hours contracts. That represents about 2% of the UK workforce.
People who take up casual employment are not normally able to claim under a PPI policy.
Exclusion – self employed and contract workers
Self-employment in the UK is at its highest level since records began almost 40 years ago, according to a report by the Office for National Statistics. Taxi-driving, construction work, carpentry and joinery are among the most common jobs.
There are 4.6 million people working for themselves and the proportion of the total workforce who are self-employed stands at 15%. This is compared to 13% in 2008 and 8.7% in 1975.
Conditions which apply to those who are self-employed, or working on a contract basis, mean they could be excluded from claiming. Or they could find themselves getting into further financial difficulty in order to receive financial support from a PPI policy.
Exclusion – part-time workers
According to the Office for National Statistics (July 2014) there are over 8 million people working on a part-time basis in the UK.
Legislation protects part-time workers from being treated less favourably than equivalent full-time workers just because they’re part-time. A part-time worker is someone who works fewer hours than a full-time worker although there is not a specified number of hours that define someone as working full or part-time. In general, a full-time worker will usually work 35 hours or more a week. Part-time workers should get the same treatment for:
- pay rates (including sick pay, maternity, paternity and adoption leave and pay)
- pension opportunities and benefits
- training and career development
- selection for promotion and transfer, or for redundancy
- opportunities for career breaks
Some benefits are applied ‘pro rata’ (in proportion to hours worked). For example, if a full-time worker gets a £1,000 Christmas bonus, and a part-time worker works half the number of hours, they should get £500. While legislation has been passed to protect part-time workers, these regulations do not extend to insurance policy terms and conditions. Thus you may be excluded from claiming benefits under a payment protection insurance policy if you work less than a specified number of hours each week.
Exclusion – joint borrowers
When it comes to borrowing money, one of the principle factors lenders take into consideration before agreeing a loan is the borrower’s income. Joint borrowers, where both individuals are in work, will evidently generate more income than if only one of them is in employment: and they will therefore enjoy a higher disposable income. In these circumstances lenders are prepared to advance greater funds and consider a default on repayments as less of a risk. Joint borrowers may be under the impression that they are both covered by a payment protection insurance policy. However, despite their loan being dependent upon two working adults it is standard practice that only the first named applicant is protected in the event of a claim.
Exclusion – existing medical conditions
Pre-existing medical conditions, such as back pain could be excluded.
The British Chiropractic Association reported the following details in May 2012:
‘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
Feeling like you’re close to breaking point once in a while is perfectly human; feeling it all the time could indicate you are suffering from stress. In an extensive study of 10,000 people, Bupa found that not only do 1 in 4 of us feel like this constantly, but that a shocking 44% of us suffer from stress.
Out of the 44% who say they feel stressed, 28% say they have been feeling that way for over a year. This computes to around one million people.
If you suffer from stress you may not be covered under a PPI policy.
Exclusion – mental health problems
The overall number of people with mental health problems has not changed significantly in recent years, but worries about things like money, jobs and benefits can make it harder for people to cope.
Every seven years a survey is prepared by The Health & Social Care Information Centre in England to measure the number of adults who have different types of mental health problems each year. It was last published in 2009 and reported these figures:
Mixed anxiety and depression 9.7 in 100 people
Anxiety 4.7 in 100 people
Post-traumatic stress disorder 3.0 in 100 people
Phobias 2.6 in 100 people
Depression 2.6 in 100 people
Eating disorders 1.6 in 100 people
Obsessive compulsive disorder 1.3 in 100 people
Panic disorder 1.2 in 100 people
According to Minister of State Paul Burstow, author of the ‘No health without mental health implementation framework:’
“At any one time, roughly one in six of us is experiencing a mental health problem”
Exclusion – age limit
PPI policies include an upper age limit. Once a policyholder reaches the specified age they were no longer covered.
Deciding which limitations and exclusions applied to your policy is time consuming – but it is essential for us to be able to make a formal complaint. By analysing individual policy provisions it means we can pinpoint your claim to specific clauses and make a more effective case.