According to the Competition Commission, those people who were buying policies did not know that they could do that with a cover. This resulted in the lenders charging a higher rate of interest. The Commission now is proposing that the PPI should not be sold along with the loan and also that all policies that are bought should come with a temporary price cap.

The work of the policy is to cover the policy holder in case he is unable to work due to redundancy or sickness. However, these policies have been criticized in the past few years as people do not find themselves eligible so as to make a claim. Also, another reason for this is that the cost of the insurance costs more than the interest that is being charged on the personal loans it is meant to cover.

For those people who live on state benefits or those who work less than 16 hours in a week, the PPI are entirely not suitable for them. Also, these should not be sold to those people who do not have their employment less than the last six months with their present employer.

Doug Taylor, personal finance campaigns manager of the consumer group Which?, says, "Since PPI is not a viable financial product so it should be put to an end. Up to two million policies have been mis-sold in the last five years, according to our research."

However there are some experts who believe that in the PPI, it may become somewhat difficult for some borrowers to repay their loans if they are not insured. If the lenders are prevented from selling PPI with the loan, it may happen that borrowers do not buy them when required. With the increasing number of job losses due to the credit crunch, this is not said to be the best time for making this change in the sale of PPI, according to Stuart Glendinning of Moneysupermarket.com.

If people want cover at subsidized rates, shopping on the internet for personal loans and then PPI seems to be the option now. This way the consumers can get the best value policies and not limited to getting insurance from their loan lender.

A comparison table will be published by the Financial Services Authority by the end of June for all the PPI policies which are available in the market.

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