I took out a mortgage in 2000. Before signing, I noticed something called mortgage insurance being added to my monthly payment. Things were tight already, it seemed very expensive, and I didn't want insurance. So I went back to the broker and asked to have it removed. You must have it, he said. What if you die? There is no what if, I said. I haven't any dependents. What if you get a terminal illness?, he said. I'll sell and move back to my mother, I said. He tried a few other things. Then, with him close to tears (he was young), we got to the crux of the matter. You have to take it, he said. "It's how I get paid."
PPI was his main source of income. If he wanted a paychequeevery month, he had to sell mortgages, and then do his best to tag PPI on at the end, at a shockingly high average commission of about 67% of the cost. He was a perfectly nice kid trying to make a living. His employers the ones setting the incentives? Dishonest manipulative charlatans.
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