Ditch Your Rip-off Protection Today!

Don't buy this insurance on the high street, because you can now apply for cheap cover via the Fool!

Since January 2003, I've been waging a war on rip-off payment protection insurance (PPI).

For the record, I've criticised this accident, sickness and unemployment cover more than six hundred times in my time writing for the Fool. Indeed, in this article from March 2003, I urged the Office of Fair Trading (OFT) to investigate the PPI market. More than 3½ years later, the OFT is presently investigating PPI policies and providers, as is City watchdog the Financial Services Authority (FSA).

I expect the results of these two investigations to be released in the next few months, but I'm not optimistic about the eventual outcome for consumers. Sadly, financial regulators have disappointed me in the past: for example, providers of rip-off store cards and extended warranties escaped major clampdowns on their businesses and, in effect, got let off the hook.

Thus, we consumers should not rely on watchdogs to make sure that we are treated fairly and get a decent deal. Indeed, Clive Briault, Managing Director of Retail Markets at the FSA, made the following comment in September 2005:

"I would prefer to see a market solution to these issues . [in] the simplest, quickest and most effective way forward, the industry could decide to improve its own standards and to move decisively towards putting in place the elements of a considerably more competitive market."

You should know that, when it comes to PPI, I'm something of a poacher turned gamekeeper. That's because after more than a decade of trying to improve the PPI industry from the inside, I quit to reform it from the outside. Hence, I'm delighted to announce today that The Motley Fool has teamed up with a leading independent provider of PPI, SecurityFirst.

Unlike most high-street PPI policies, which charge the same premium to all policyholders, SecurityFirst charges premiums based on the policyholder's age at the outset which do not increase over time. Hence, young workers enjoy lower monthly premiums, because they are better risks, since they are less likely to fall ill and more likely to find a job quickly after being laid off.

However, anyone aged under fifty should be better off than they would be with even the cheapest flat-rated PPI policy. As you can see from the following tables, SecurityFirst's accident, sickness and unemployment cover is a fraction of the price of the policies sold by high-street lenders (premiums are based on a 30-year-old policyholder):

1) PPI for personal loans

As you can see, high-street lenders charge premiums between five and ten times as high as Best Buy providers.

2) Mortgage PPI

Although mortgage lenders charge more modest premiums for PPI, most high-street policies are still three times as expensive as the cheapest policy.

3) Stand-alone PPI (income protection which pays out for up to a year)

Again, SecurityFirst's premiums win hands down in this section, making it the PPI policy of choice for borrowers and anyone who needs affordable cover against being out of work.

To sum up: you can save hundreds -- even thousands -- of pounds by buying cheaper PPI, rather than accepting the over-priced deals offered by credit-card, mortgage and loan companies.

See if you can find cheaper cover with SecurityFirst for loans, mortgages and stand-alone cover.

Many thanks to my old friend and rival Simon Burgess at SecurityFirst for providing the above data.