Top Adding - Insurance

In recent months you'll have seen lots of comment in the UK press about the evils of Payment Protection Insurance. In our view, the problem is not so much about what the insurance does, but more about how it's sold.

Payment Protection Insurance protects borrowers who fear they'd b

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

e unable to maintain their debt repayments if they lost their income due to illness, accident or unemployment. The basic idea of the insurance is sound but the problem is that to make a valid claim, you have to satisfy certain criteria and quite a few people fail to do this. For ex

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

mple, if your job is seasonal or casual, or your illness was due to back pain, you won't be able to claim. In fact only 4% of policyholders make a claim and one in six of claims are rejected.

However, the worst aspect is that lenders have clearly pressurised some people into buyin

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

g Payment Protection Insurance when they really didn't need it - either because their employer will continue to pay them if they're off ill or they already have other types of insurance that provide similar benefits or the nature of their employment would disqualify them from claim

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ng. Indeed, according to Defaqto the financial researcher, 60% of online credit card companies and 30% of loan providers fail to show you the terms and conditions for the insurance before signing you up. It's these terms and conditions that tell you when you can't claim.

Only a fe

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

w months ago FSA's published the results of its mystery shopper investigation into Payment Protection Insurance. This concluded that around half of the lenders shopped failed to explain the details and exclusions to customers or ensure the insurance was suitable for their clients.

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

hilst the investigation didn't conclude that lenders were compulsorily selling PPI, they found it was frequently added to loan quotations without it being explained that the insurance was optional.

And even worse in our view, many lenders do not explain the full cost of the insura

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

nce. In many cases the full cost of the insurance (for the entire period of the loan), was being added to the loan as a lump sum at the outset rather than being paid as a monthly premium. This effectively means that the borrower cannot cancel the insurance without paying off the en

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ire loan - and interest is charged on the insurance premium!

Now after months of deliberation the Financial Services Authority (FSA) has at last shown its teeth. It's told Banks, Building Societies and other lenders that they could be forced to cease selling Payment Protection Ins

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

urance alongside loans and mortgages if they fail to clean up their act.

In a confidential letter sent to the Council of Mortgage Lenders leaked to the National Press, the FSA threatens to bring in “corrective actions” if Payment Protection Insurance continues to be miss-sold. The

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

memo goes on to indicate that the FSA would prefer the lenders to put themselves in-order, but if necessary, the FSA threatens action. Its most likely directive would be that sales PPI must be made quite separately to the sale of the loan or credit facility. This will clearly hit l

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

nders profits as last year alone they earned over ?1 billion, yes BILLION, in profits from Payment Protection Insurance.

Over the years lenders have certainly honed their ability to charge for PPI. Only a few months ago we came across a high street bank that charged ?5,150 for PPI

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

to cover a loan of ?16,000. They then added the cost of the insurance to the loan increasing the amount borrowed to ?21,150. This meant that of the ?300 monthly repayment, about ?70 represented the cost of the insurance. What the lender never told the borrower was that equivalent

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

nsurance could be bought on the Internet for around ?20 per month and the insurance from the Internet was cancellable at any time without penalty.

According to the Managing Director of British Insurance Ltd, Simon Burgess, the big high street banks typically charge ?30 per ?100 of

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

loan insured. This compares with between ?4 and ?6 if the policy is bought separately on the Internet. This price comparison view broadly supported by uSwitch the price comparison service, which says taking out PPI with banks can increase the cost of the insurance by nearly 500%.

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

So is PPI a good idea and what's the best way to buy it?

If you are in any way concerned that you'll be unable to maintain mortgage or other debt repayments if you are off work due to illness, accident or unemployment, then PPI could be a good idea. But you need to do a bit of hom

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ework first: -

If you're ill and off work, how long will your employer continue to pay you and is that at your full rate of salary? If they're generous, you might not need insurance!

Do you have any other insurance that will pay out if you're ill?

Then search the Internet for “p

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

yment protection insurance”. We can almost guarantee that that's where you'll find it cheapest.

Always shop around on the Internet for competitive premiums.

Always, choose a policy that charges you a monthly premium.

Then, before you buy online, check out the policy's conditions

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

. Especially find out how long you need to be off work before you can claim and whether the claim can be back-dated to the first day you were off work. Also check out the conditions that allow you to make a claim. Does the nature of your job or your current state of health make it

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

nlikely that you'd be able to claim? If so, don't buy!

Remember, PPI can be a good idea, but don't be forced into making a quick decision. Make sure the cover applies to you and it's good value. Follow our advice and you're unlikely to go wrong. You can then sleep soundly at night

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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