We all like to protect ourselves and our families in every way we can and when it comes to financial matters this should be our utmost concern, especially when taking out a loan. While you may have no worries now and be able to meet the monthly loan repayments comfortably while you are working, have you considered the possibility that should you come out of work for any reason, how you would carry on servicing your monthly commitments? There is an insurance specifically designed for this, it is called loan cover or loan payment protection insurance, and it will pay out a monthly sum if you find yourself out of work due to long term sickness, an accident or unforeseen unemployment.
When taken out correctly the loan cover will give you and your family the peace of mind that if the unexpected should happen - and it could in a world where the phrase "a job for life" no longer exists - you would at least have an income enabling you to carry on paying your loan repayments each month. However, where you choose to take the insurance from will depend on the cost of your premium for the loan cover and also the quality of the product. The dearest loan cover premiums you will undoubtedly be quoted for are with the high street lenders and banks. But, shop around and go with an independent specialist provider, and you should pay less.
The difference between the two can be quite astonishing and the amount you could save could be in the thousands over the term of the loan, so it really is worthwhile shopping around for cover rather than accepting the cover offered by your loan provider.
The quality of the product can also differ and recently the high street lenders and banks have been the target of investigations into the sector by the Financial Services Authority and the Office of Fair Trading after it was found there has been wide mis-selling of payment protection. However it is mostly the big high street names that have been found guilty of this and of course this is another excellent reason why you should go independently. So if you want the peace of mind that loan cover can provide then shop around for your cover - it's the only way to make sure you get a quality product while getting the cheapest premiums.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of low cost www.britishinsurance.com"> loan cover , mortgage payment protection insurance (MPPI) and loan payment protection insurance.
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