The recent scandal regarding PPI claims (Personal Protection Insurance) has ruffled more than a few feathers in the UK. As with the housing crisis in the US and in other countries, this product has affected customers throughout the spectrum, from young people getting their first loans to older people looking for more security. Given these circumstances, it is worth keeping a few things in mind about these policies.

First and foremost, it is important to know that taking out personal protection insurance does not carry weight in the determination of whether a potential client receives a loan or not. Many bank customers have been led to believe, or simply assumed, that their loan application would be viewed more favorably if they purchased PPI. This is simply not true; even less so under the new regulatory regime that has been proposed. If it seems like the purchase of a second, distinct product determines the acceptability of a loan, consumers should seek out a new loan provider.

A corollary of this first point is that customers are not tied to the bank they borrow from. Independent PPI brokers exist, often with much more competitive rates. Often, these rates can be up to 80 percent cheaper. The best strategy is to shop around rather than feeling forced into an agreement without knowing the marketplace.

A more misleading claim is that loan applicants must take insurance in order to qualify for a loan. No law requires this or any other insurance. Any lender who claims this is misleading you, so be on guard.

The fourth commonly misunderstood aspect of these policies is that they will be easy to cancel. Many consumers simply agree to the terms, assuming that they can opt out at any stage. Several rules make this more complicated than it should be and additional costs are often involved. As with any contract, the rule of thumb is never to assume anything. Look at the fine print.

Some insurance customers also assume that they will qualify for payments equal to their salary from personal payment insurance. However, this type of policy only covers the debt to which it is linked. Anything outside that realm, from medical bills to monthly paychecks, is up to the customer, not the bank.

New regulations are putting an end to another major flaw in how the public thinks about this insurance. While some banks may insist that customers have to make a quick decision regarding PPI, the fact is that there is no time limit. New government regulations will set a specific waiting period, somewhere from one to two weeks.

Despite all the regulations, PPI claims make money, which is why they are around in the first place. So, don't expect this issue to go away. The government is currently taking steps to bring these controversial transactions under control, but in the end, it is up to the consumer to be informed and make a decision. Follow these guidelines, add a little common sense and always remember to resist being rushed. Information and time, now more than ever, are your best friends.