To get the cheapest premiums and a quality policy you understand you need to shop around for loan protection cover. When taking out a loan the majority of lenders will offer loan protection cover alongside the money you are borrowing. However, very often the premiums lenders charge for a policy can be up to 80% more than with the cheapest quotes found with a specialist provider, so it is always best to compare the market with an independent specialist of loan protection cover.
There have been many problems associated with payment protection and cost is just one of them. When the Office of Fair Trading began investigating in 2005 they found that the consumers were getting a very poor deal. The selling techniques were very poor and this led to many buying a policy they did not want or could not claim on. Following fines handed out by the Financial Services Authority and the Competition Commissions' investigation into the sector some changes have been made.
Buying a loan insurance policy can be a wise move. With millions of people borrowing more than they earn by way of loans and credit cards it is essential that you protect your borrowing in some way. Relying on savings should not be your only option to fall back on, because if you were to continue being unable to work for many months your savings would soon dwindle. Finding yourself out of work due to suffering from an accident or illness or being made redundant would leave you struggling. However, if a policy would be suitable then it could provide you with the means to continue meeting your repayments.
A policy could kick in once you had been continually unable to attend work for between 30 to 90 days. Once the policy started paying out it would then continue, giving you a much-needed income for between 12 to 24 months. Usually this is more than enough time for the policy holder to get back on their feet, recover or find another position. However, some thought should also be given to how you would manage to continue making your repayments after the policy had ceased.
There are exclusions to be found in all loan protection cover. Some exclusions are included regularly but others vary from provider to provider. Those who only work on a part-time basis, are retired or self-employed, or suffer from a pre-existing medical condition could find a policy unsuitable. You do have to check the conditions thoroughly because the exclusions may not apply to you. For example, those who do have an illness could take out a policy and be eligible to claim against it if they have not suffered from the illness within the past two years before the day of buying cover.
By going to a specialist provider of loan protection cover you can make huge savings along with getting the essential advice that is needed to make sure the policy is suitable. Information can be found by way of articles and FAQs, and using this information before buying is essential.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of loan protection cover, mortgage protection insurance and income protection insurance.
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