Are you worried about what would happen to you financially if you lost your job due to involuntary redundancy? If not, you should be. Of course, you should not stress over such matters if you are happily employed. But, you should be proactive at protecting your financial situation. The best way to do this is to not rely on the State for assistance. It is to take matters into your own hands through the purchase of a payment protection product.

Payment cover comes in the form of loan protection, mortgage cover, or income payment cover. These three products make up the payment protection insurance (PPI) sector. This umbrella of products essentially serves as your best option for redundancy protection. Loan cover can be valuable for managing monthly debt during a period of unemployment. Mortgage payment protection serves to help you manage monthly mortgage repayments so that you can hold on to your home. Income payment insurance helps with maintenance of various financial obligations. All three products provide benefits through monthly payments that replace your job income when you are out of work because of a covered event.

Get to know the factors that affect your payment protection

There are several important elements to consider as you get to know the payment protection sector. The first issue is to determine whether you are eligible for cover. Other issues include: The length of payouts, the starting point for benefits payments, and the amount of cover you want.

Eligibility for cover under the typical loan protection policy requires that you are employed full time for a period of at least six months. People that are employed full time or retired are not able to collect benefits. Another excluded group are people that are dealing with pre-existing medical conditions.

Once you have established that you are eligible to collect benefits from a payment protection, you can begin to look over the details of various plans. Do not be afraid to ask for disclosure of terms if details are not openly shared by a provider. The first issue to think about is how long the benefits will be paid. Typically, policies pay out over a period of either 12 months, or 24 months.

Benefits payments usually begin at 30 days, 60 days, or 90 days after the insured event occurs. This is an extremely critical issue as it affects the amount of time you will go with no income after you are displaced. Most people would want a policy that starts to pay 30 days after the insured event to avoid a gap in income. If you have savings or other sources of funds, or perhaps severance pay, a 60 day starting point, or 90 day starting point, might be okay.

The maximum allowable monthly benefit payment is either half the normal monthly gross income, or £1500, whichever is lower. Though most would want the highest amount of cover to protect lost job income, some people that do have other funds, elect to save on premiums and take out less.

Typical events covered with loan protection

Involuntary redundancy, accidents and illness are the common events you can protection with a payment cover policy. Involuntary redundancy is obviously useful if you want to secure yourself after displacement. Accident and sickness cover is vital to protect yourself when health issues cause you to miss an extended amount of work time.

Not everyone wants to cover both events with they payment cover. Some people already have good protection for accident and sickness through their employer. Others need the accident and sickness benefit but may decide that they have enough funds saved to protect for involuntary redundancy. This can be risky though, unless you are well education and well-skilled, and believe you can quickly get new work.

Carer cover is an add-on benefit that you might want to insist upon in a payment insurance policy that you would buy. This extra benefit pays your monthly payments when you must leave work to care for a loved one who is seriously sick or injured. It is a good cover to have to balance your need for income and family.

Comparing financial institutions and independent insurance providers

Financial institutions are large banks that sell a variety of financial instruments. Their broad focus sometimes makes it difficult for them to offer expertise on any one particular area. In contrast, independent insurance specials are usually experts on the insurance products they sell. This enables them to help you get the right plan at the right price.

Speaking of the right price. A major difference between large banks and insurance specialists is their price points. Financial institutions notoriously sell expensive policies, which is why they have historically engaged in some mis-selling of policies to ineligible consumers, as well as pressurized selling tactics related to bundling of loan and insurance products. Independent specialists have much more affordable insurance policies. Loan protection is usually about 10 times less expensive from a specialist. Mortgage cover is around four times cheaper. Income payment protection is about five times less expensive.

Another thing to consider is the ethical side of insurance. As mentioned, many large banks have come under fire for some unethical selling of policies. The Financial Services Authority (FSA) issued fines against many high street companies that it found guilty of mis-selling in 2007. The agency continues to monitor the sector to ensure these practices are discontinued.

In 2005, Citizen’s Advice filed a super complaint with the Office of Fair Trading (OFT). In it, the group addressed the mis-selling, but also the bundling of loans and insurances that created unfair situations for consumers. The OFT responded by turning the payment protection sector over to the Competition Commission for further review. This led to several recommendations for sector improvements. One notable change was the implementation of a seven day waiting period during which lenders cannot sell loan protection or mortgage cover to a new borrower. This has freed consumers from pressure tactics and enables them to look in the open market for a better deal.

If you want peace of mind that if you lost your regular income due to redundancy or falling ill or being involved in an accident that left you unable to work, you will have an income, you should consider payment protection. If you have loan repayments to service each month then loan protection can be ideal.

What will loan protection do?

Loan payment protection insurance will supply you with an income if you were to suffer from either of these events. You will need to stand to so many days before being eligible to claim on your policy and this amount of time is dependent on your provider. You will therefore need to check in the terms that they offered before rushing into taking out the cover.

How long will I need to wait before making my claim?

You might have to wait for a mere 30 days with some providers before you can claim on your policy. However with others you can need to have suffered incapacity or unemployment for 60 or even 90 days at least before you can make a claim. With these two latter dates, this leaves you vulnerable to missed repayments for up to 3 months.
As the differences are vast you will be wise to have checked the terms offered by any provider you are considering taking out cover with before buying.

How much income will be paid?

You will get back the amount of income that you chose to insure when taking out your loan protection policy. This will be so much of the sum of your loan payment that you have to make each month and which your provider pre-agreed with when you applied for the cover.

All providers will limit this amount but you can expect to receive up to £1,500 or half your gross earned income. This will then be paid each month, tax free, for up to the term of the policy if needed.

So how long will my benefit continue?

Once you have made a claim and begin to receive your benefit you will then get your payment each month for the term of the loan cover. This can be as long as 12 months or with some providers it can be for 24 months. If your policy paid out over 24 months then you can expect to pay more in premiums of course and you will need to take into account that the cover will cease should you need to claim until the term.

Tailor the protection to suit your needs

The good thing about payment protection insurance (PPI) policies is that they can be tweaked to meet your circumstances. You might want to take full protection for unemployment or incapacity in one policy and then claim should you suffer either of these events.

If it suited your lifestyle better then you can look into taking out just redundancy protection for the repayments of your loan. Alternatively you might just want to take out cover to safeguard against the chance of becoming incapacitated alone. The choice is yours.

Other types of protection you might consider

While loan protection will cover your loan repayments this type of policy is no good if you have mortgage repayments to protect. In this case you might want to consider taking out mortgage payment protection insurance (MPPI). Mortgage cover will allow you to protect your monthly mortgage repayments in the same way.
Income payment protection insurance provides a tax free sum that you can use as you want. You will have money to be able to spread about as you wish.

Why you should consider a policy

In the event of being unable to work or unemployed, State benefits can often be a bit of a letdown when looking for money to continue meeting the demands of your loan. Very often the little income you might be eligible to receive falls short of the income you are used to bringing home from your normal wage.

You can also have to wait for some considerable time before you see any money from your claim and by this time you can already be in debt and have your lender on your back.

How to get a good deal on your protection

In order to get the best deal on your loan protection you need to shop around and check the quotes on offer for the cheapest premiums. If you look for your loan insurance online this is easy and you can also compare the terms and conditions of the cover.
While you can take insurance with the lender on the high street this is usually one of the dearest ways to take your policy and you do not have the options you will have with the independent provider.

Always check for suitability

Finally, price isn’t just the only important thing when buying a PPI policy. You need to ensure that you are eligible for the cover too. You should always check for suitability before taking out your policy as there will be at least some of the common exclusions in the small print. Some providers might add in more than others so you do have to compare then when you are comparing the cost of the cover.
For instance you will have to have been working for at least 6 months before applying for loan protection and must be in a full time position.

Other exclusions you can find in the cover

You will have to reside in the United Kingdom, the Isle of Man or the Channel Isles in order to be eligible to make a claim on the policy you were considering.
You should also check the cover with a fine tooth comb if you are self-employed as usually a claim can only be made should you have to cease trading permanently through no fault of your own.
Also check the wording if you have a pre-existing medical condition as generally you can be ineligible to claim if the illness were to surface and you became unable to work.

Loan protection provides peace of mind that your ability to service your monthly repayments will not be affected even if you become too ill to work for an extended period of time due to involuntary redundancy.

Many people will admit to having something of a love-hate relationship with their loans including the mortgage. Much as they make many aspects of modern life possible, they can also be a liability and a millstone around your neck should something go wrong and you lose your income. Loan protection insurance is one option you may have for sleeping a little more easily at night free from at least some of the ‘how would I cope if I lost my income?” worries that plague so many.

Unfortunately, such worries are not irrational. In today’s world redundancy can come without warning and overnight your income could disappear. It’s also not unknown for people to be unable to earn money because they have been hit by illness or an accident.

Whatever the cause, the mortgage and loan companies may be sympathetic and even try to help for a short period, but this will not stop them moving inevitably to repossession and debt recovery activities. If not dealt with, this could lead to the loss of your home, car and other possessions.

Even if you look to the government for help, your options may be limited. It is true that in 2009 the government announced a revised package of help for people that had lost their income but this is restricted to mortgage help only and even there is it limited. It will only contribute 70% of the interest payment. It will not cover any of the capital debt and you will have to pay 30% of even the interest yourself. It may not be available if you have savings over a modest level and it will only start to pay out 13 weeks after you lose your income. Although it may be helpful, serious arrears can still build up quickly and it may not satisfy the mortgage company. It will not do anything at all to help with credit cards and other loans.

By contrast, loan protection insurance is much more broadly based. If you are protected by such a policy and lose your income, it will pay one or more of your loans to levels specified by you at the time the policy was selected. So it would be possible to cover your mortgage and credit cards. The maximum amount payable can be a respectable 1500 pounds per month or 50% of your old income – whichever is the smaller of the two.

These payments will continue until you find replacement income or up to a maximum of usually 12 months though this may be 24 months on some policies.

Obtaining loan payment protection insurance should be routine for most people. You will need to be in permanent and verifiable employment – some forms of part-time or self-employed work may cause some issues with cover. If you are working in a very dangerous occupation or participating in dangerous sports then again you may find that the insurance will cost more. It may be similarly more expensive if you suffer from an existing serious medical condition and those working outside of the UK may find it difficult to obtain.

In fact, this insurance is only one of a whole family of insurance policies generally called Payment Protection Income or PPI. In this category of products you will find a very large degree of flexibility and the ability to select one best suited to your needs. For example, if your mortgage is your only major regular outgoing then you may only need to protect that – this would be called a Mortgage Payment Protection Insurance (MPPI) policy. Alternatively you may be in the position of having several outgoings but a generous employer based sickness and accident benefit scheme in which case you may only wish to take our Unemployment Insurance.

Whatever your needs, there will be a policy to suit you. To find it, you can look at two sorts of insurance provider.

The first of these are the loan companies and mortgage lenders etc. These organisations have a long history of selling such insurance quite aggressively as part of the loan application process. Many of them may have implied to potential borrowers that a positive decision on the loan could be more easily obtained if they took out such insurance with their organisation. That was incorrect and in reality a loan applicant is under no obligation to purchase this insurance from the loan provider.

In fact, to avoid this pressure arising, from 2009 lenders will be banned from selling this insurance to loan applicants until 7 days after loan approval. That’s just as well because typically loan protection insurance purchased from a credit card or mortgage lender will cost several times more than similar insurance purchased elsewhere.

The other source for loan protection insurance is the specialist insurance providers, many of who operate over the Internet. These companies are experts in providing the advice and specific insurance necessary to protect your loan repayments and at a cost you can afford.

Wherever you obtain your policies from, they may share certain characteristics that you may need to study carefully. Some may have a ‘qualification period’ in that you will not be able to make a claim until you have held the policy for a minimum of 6-12 months. Virtually all will only cover causes of income loss that could not be construed to be under your control. In other words, they will not pay out for pregnancy, voluntary redundancy, career or study breaks, some types of dismissal and just about any form of voluntary resignation.

Some may start to pay out after 30 days but others after 60 or 90 days though some will backdate their payments. To make a claim you may be asked to prove the reason for the loss of income and once approved, you may need to provide regular evidence that you are actively seeking employment or are medically unable to do so.

Loan protection insurance could help you keep your home and your belongings where they should be – around you. It may be worth investing a few minutes in checking it out in more detail.

If you choose to shop around for your loan protection Glasgow policy then you can make some great savings when compared with taking your policy from the lender on the high street. A policy could be tailored to your needs, which means that you would only have to pay out for the protection that is needed.

What does cover do?

A loan protection Glasgow policy would provide you with an income in the event that you lost your own through involuntary unemployment or incapacity, if you had chosen to cover both events. You could claim upon your policy once a certain amount of time had passed and it would then continue for a period of time which again would be dependent upon the provider.

How much income would my policy payout?

The amount of income you would get back from your chosen loan payment protection insurance policy would depend on the amount that you chose to protect when you took out the cover. You would choose an amount of the repayment you make and the provider would have to pre-agree to this providing it is within their range. This is then your tax free income each month after the deferment period for up to the term if needed.

What is the deferment period?

The deferment period can differ with providers. With some providers you might be eligible to claim on your cover once you have suffered one of the events for a period of 30 days and with other providers you could have to stand to as long as the 90th day before then claiming on your cover.

As the terms differ substantially you might want to check to make sure that you would not have to wait for as long as 90 days before being able to make a claim on the insurance.

How long might I continue receiving my benefit?

You might be offered a policy that would continue paying out for over 12 months with some providers while others could continue supplying you with an income for up to the 24 month if it should be needed. You do pay out more of course if you could claim on your income for the longer period of time so you do have to check with the provider as to how long your benefits last when comparing the premiums.

Check for suitability before buying cover

You would have to check to ensure that you would be eligible to claim on your loan protection policy as there are some exclusions to be found in the policy. There could be just the most common exclusions whilst other providers might add in many more. You do need to check these against your circumstances as they can mean that you would be ineligible to make a claim on your cover which renders it useless.

For instance you have to be in full time work and have been so for a period of so many months at the time of you applying for the cover. You also have to live in the UK, the Isle of Man or the Channel Isles to be able to apply for protection.

Choosing what events you want to take out a policy for

You could choose to take out your policy to pay you an income if you were to suffer involuntary unemployment or incapacity in the same policy. You could also choose to take out a loan protection Glasgow policy just to protect against the possibility of redundancy alone. Alternatively you might just choose to protect against incapacity alone if this should suit your lifestyle more.

The events you protect against would help to determine how much the cost of the insurance would be so this should be one of the first choices you make when applying for your protection.

Why should I pay out for protection?

If you do not have anything to fall back onto then you would be at risk of falling behind on your repayments and have the worry of being taken to court by your lender. Should you apply to the State for an income then you might find that you are unable to claim any money. If you are entitled to money then the State would only pay an income so that you could maintain some of the interest repayment of your mortgage.

With a policy you would know how much money you would have towards being able to meet your total repayment each month.

The benefits to a policy

One of the biggest benefits to paying out for protection is that the worry of falling into debt is lessened as your loan protection Glasgow policy provides a substantial sum towards meeting your monthly repayments at least for up to term of the policy.

Nobody likes talking about redundancy, sickness or accidents. They’re not subjects likely to create rib-splitting hilarity over a few drinks. Sadly though, they do happen and they’re not rare. No insurance on earth can prevent bad luck but if you have a policy that provides loan protection in Liverpool you may at least be able to mitigate the worst effects of such events should they happen.

What is loan protection in Liverpool?

Loan protection policies are part of a family of insurance usually call PPI for payment protection insurance.

All these policies take as their start point the assumption that you have regular income, part of which you need to meet your regular monthly payments for things such as your mortgage, car, credit cards, HP agreements and other loans. They also presume that if you lose your income, these payments would rapidly become a problem for you.

The insurance works on the basis that if you do lose your income for reasons beyond your control, it will make your monthly payments to your specified loans as per the policy agreement.

It is that simple!

Do you need it?

Only you can know that. If you are either extremely wealthy and don’t need your income or are fortunate enough to be entirely debt free, then you may not need this form of insurance.

It’s also possible that you may decide that you need protection against the risks of redundancy but not accidents and sickness because your employer has a very generous and long-term sickness and accidents benefit scheme.

What may be worth keeping in mind though is that if you do lose your income, the various parties you owe money to might not be sympathetic. If they are not, and you are unable to maintain your payments, you may see legal action for recovery and repossession rather more rapidly than you think. You car, furniture and even house could be reposed very quickly.

What about government help?

It is true that some help may be available from the government, but at the outset this will only be if you hold savings BELOW a modest amount. If you have savings above that level, the government will expect you to use them before they contribute.

Even if you do get government help, it is limited to a percentage of the interest only of your mortgage. You will need to find the balance yourself each month AND the agreement of your lender to accept interest-only payments. If they are not willing to help, they will start repossession activities.

There is little or no government help available for other forms of loan or debt.
What is covered by loan protection in Liverpool policies and what is not?
This cannot be stated precisely because it will depend upon the policy you have selected and paid for. There are though some general points that typically apply if you have purchased a policy and it includes sickness/accident cover:

Who can get this insurance?

Just about anyone who is in full time employment and working for more than a specified minimum number of hours per week. You may need to have held the policy for a period of time before you can claim.

Some may have to accept that this insurance may be a little harder and expensive to find. You will probably come into that category if you:

• Have an existing serious medical condition
• Work in certain categories of self-employment or in a dangerous occupation
• Have an unclear work history
• Work outside of the UK
• Participate in some categories of dangerous sports or pass times

Who sells it?

You may be offered these types of policy from your lender or loan provider. Although perfectly valid, their insurance is very likely to cost several times more than the same insurance sold by a specialist provider of loan protection insurance on the Internet.

It’s also interesting to note that originally many loan providers worked hard to sell this insurance as part of the loan application process. They may have suggested that a successful outcome to the application could hinge on purchasing their form of payment protection insurance. This practice is now being stopped and in future loan providers will need to wait until 7 days after loan approval before they can offer these policies.

So, if you are looking for insurance covering loan protection in Liverpool, it may pay to look through the Internet to find the best deals possible. You have the time and there’s no need to be rushed. It’s may also be worth keeping in mind that the policies can be taken out at any time – not just when you apply for a loan but if you already have one or more.

Few people are lucky enough to get through their lives on a sure financial footing all the way through, and things like debt are a simple fact of life for many families. Loans can be used to fund all sorts of things, from higher education to a home extension or even a dream holiday. Most people will be quite confident that they can pay the loan off when they take it out, but things change in time and there is always of course the risk that someone’s financial circumstances will change. A particularly large debt can become a major problem if somebody were to lose their income, for example, and this can be even more frustrating if somebody has lost it through something which was not their fault. However, loan protection for Leeds consumers has proved a useful safety net for many people, as it has done for people around the UK.

This is a kind of insurance for a debt which will help somebody with regular repayments in the event that they lose their income due to involuntary redundancy, illness, or injury after an accident. In effect it is designed to help somebody financially with the monthly repayments if they lose their income because of something which was not their fault. The payouts are often tax-free and monthly, and may cover all or at least a significant portion of the regular repayments until somebody is working again, or until the maximum payout period is reached on a deal.

Loan protection in Leeds and across the UK is part of the payment protection insurance industry and is really just one variation of a whole range of products which are designed to support someone financially in the event they lose their income unexpectedly. It is also a kind of insurance which has often been sold by lenders and banks at the same time as they provide borrowing. This is often referred to as ‘at point of sale’, and involves the applicant for a loan being offered the bank or lender’s own form of protection insurance.

Many people have been tempted because it can be convenient to agree to the cover being set up in this way, and it can prove particularly poor value compared to policies offered by other insurance companies. This form of selling has also been controversial, as the payment protection insurance industry has been investigated by the Financial Services Authority (FSA) and in 2007 this body fined a number of well-known high street lenders who were found to have sold policies to people who did not need them or who did not qualify, such as the retired.

While there is no doubt that some banks and lenders still push this insurance at poor value, there are plenty of deals which are out there which are much more cost effective. The FSA action put more attention on independent insurance specialists who only provide standalone loan cover and do not attach it to borrowing. They can be as much as 80 per cent cheaper compared to premiums for loan cover offered by some high street names.

Besides understanding how this cover is often sold, it can also be beneficial to have a decent working knowledge of how it works before you go for a policy. There’s little point in taking out something which you don’t fully understand, although the basics are quite straightforward. For a start you will be normally allowed by an insurance company to protect a significant proportion of your regular repayments on your loan, although because of restrictions people with particularly large debts may not get a monthly payout which covers all of their repayments.

After somebody has claimed successfully because of involuntary redundancy, or loss of income due to illness or injury, they can then expect the help with the repayments to continue every month until they are in work again having recovered or found a new job, or until the policy payout period expires, which can be 12 months with many policies.

The idea with loan protection in Leeds is to provide a viable helping hand with what may be a large and significant debt. Without this form of protection somebody can find themselves eating into limited savings, or simply starting to struggle straight away, which may have implications for someone’s credit rating and can even result in court action or repossession of property. This is why many consumers across Britain have at worst found peace of mind from their premium and at best have found it can reduce concern at a difficult time of redundancy or illness, taking off some of the pressure.

Do you need loan protection in Scotland? At some point most of us have felt that slightly worrying feeling as the deadline nears to pay a credit card or loan bill but there is not quite enough money in the kitty to make the minimum repayment. This can happen even when people have got money coming in as all of life’s additional costs can sometimes put a strain on the budget. Problems like this can take on a new dimension if you lose your income unexpectedly, such as due to long-term illness or involuntary redundancy. This is where loan protection in Scotland has proved useful for people who would otherwise have struggled to keep up with debts, because of something which was beyond their control.

This is actually a form of insurance policy which acts in the background of your loan, and pays regular instalments towards your repayments in the event that you are left without your job wages due to something which was not your fault. This is typically classified as involuntary redundancy, injury after an accident, or illness.

In exchange for a regular premium, the insurance company agrees to pay a proportion or even all of your monthly instalments for a set period after your claim is successful. Normally a policy payout period lasts as long as 12 months, although some go all the way up to 24 months.

Loans of thousands of pounds can take a considerable amount of time to pay off and may eat into your regular income considerably. If you suddenly lost your wages, how would you be able to keep up with the repayments? Some people will be lucky enough to have substantial savings set aside, while others will have investments such as stocks and shares to fall back on to provide additional income.

Protecting yourself

But for most people an insurance policy could be one of the most effective ways of protecting against falling behind with a debt and ending up with a poor credit rating, a court case, or with having property repossessed. Insurance like this can be bought from cover companies directly, or is often sold in conjunction with loans by banks and other lending companies.

People who have credit cards, mortgages, or other forms of debt may have been offered this protection when they took out the loan, and this is sometimes referred to as attaching cover to borrowing. Selling policies like this has come in for criticism and the Financial Services Authority has in the past found some firms guilty of mis-selling policies in this way, to people who were retired or who did not qualify for another reason, because they were part-time employed only, for example.

Furthermore, the premiums for policies supplied by lenders like this may be much more expensive than those which are available from more independent specialist companies who only sell cover, not borrowing. As with any insurance, it can pay to shop around for loan protection in Scotland, as you could save a considerable amount of money by going with the more independent company.

The cost of loan protection is defined by one or two common things, including how much you would like to insure on your regular repayments. Normally a policy will pay you a monthly amount towards your commitment, which may cover all of the repayments after a successful claim or a proportion of it. You can often protect up to a company limit or to a set percentage of your current wages. Of course the higher amount of payout per month you would expect, the higher the premium will often be.

You can also choose when you would get a first payout after a successful claim, as no company will pay you immediately after you file it. Normally you will have to wait 30 to 90 days before the first instalment arrives, and the shorter you wish to wait, the more expensive the premium might be. However, insurance like this comes at different levels and you can often insure against only one or two of the three common eventualities. So you may be more worried about losing your income due to involuntary redundancy, or perhaps sickness. Focusing the cover in this way can often help to reduce the premium too.

Loan protection in Scotland can help people get peace of mind that they would get support with a debt for the equivalent of just a few pounds per £100 pounds worth of protection. Some people would immediately fall into difficulty if they lost their wages, and cover like this can take away the worry of what they are going to do. This can actually help somebody to get a new job if they have been made redundant, as they may be able to better concentrate on hitting the employment market again, while those who are struggling with a prolonged illness can also benefit from knowing that they are going to get viable support with their repayments.

Should you have loan repayments to service each month over many years then you should give some thought as to how you would be able to maintain these payments should lose your income. An income could be lost through becoming a victim of redundancy; it could also be lost if you become unable to work after being involved in an accident or an illness and become unable to work. Should your circumstances be altered by one of these events you could have to struggle to find the money unless you had the foresight to take out loan protection.

How does loan payment protection work?

Your loan payment protection insurance policy is there to fall back onto if you were to suffer from one of the events you had chosen to take out protection against. The income you got back from the policy would be tax free and would be welcomed at a time when it is needed the most.

Your income would be paid once the period of deferment had been reached and for its term which should be checked before taking on the protection as the terms can differ by quite a lot. Providers give you the information you need to check the start and end dates of the protection so you can be sure of taking out the right policy.

The income would allow you time to concentrate on making a recovery so that you could get back to work or allows you to be able to search around and find a suitable position again.

When can I claim on my policy?

Some providers allow you to make a claim on your loan payment protection once you have been unemployed or incapacitated for a mere 30 days. With other providers it might be the 90th day before you are able to make a claim so this would be one of the first things you should check when considering a policy.

If you cannot claim on the protection for 3 months and have secured the loan on your home then you would already be in arrears and could face repossession.

How much income would I receive?

When taking out your loan protection policy you would choose the amount of your monthly loan repayment you want to insure. This amount would have to have the provider’s approval as all will state a maximum amount that you are able to insure up to.

The payments which begin once the deferment period had passed and would be tax free and would make a huge difference to your lifestyle during a time when you need it the most. Without these payments to fall back onto you could have to struggle to find the money each month and could fall back into arrears with the repayments.
How long would the protection payout?

You should check the terms and conditions of any policy you were considering taking out to find out how long the provider would continue to payout. There are some providers that will offer you 12 monthly payments on your loan protection and others that could offer 24 months of protection.

A 24 month policy would cost more in premiums than one that paid out for 12 months so this would have to be taken into account when you compare the cost of the insurance.

12 months of payments might give you plenty of time to have made a recovery from your accident or illness or would allow you the time to have searched for and found work, so this should be given some thought also when choosing the length of cover.

What about eligibility?

Ensuring that you are eligible to make a claim on loan payment protection is essential. If not then you would payout for cover that you could not possibly benefit from which would of course just be a waste of money. Some providers could add in more exclusions than other providers so you would have to compare these before you go rushing into taking out the policy.

For instance residing in the United Kingdom, the Isle of Man or the Chanel Isles is essential in being eligible to claim. You would only be able to make a claim if you are in full time employment and have been in work for at least 6 months prior to you taking on the cover.

What other exclusions could be included in the policy?

Here are some of the most common exclusions that you could find in your policy. However as mentioned earlier it is essential that you do check the small print of any provider before paying for your loan protection.
If self-employed then providers will generally only payout should you to cease trading permanently and through no fault of your own. However again you have to check the small print.

You might also be unable to claim if you are suffering from an ongoing illness or have been incapacitated due to suffering depression or anxiety.

You would also be ineligible to make a claim for redundancy if you knew that you were going to be made redundant when you took on the protection. Again checking the small print is essential.

Choose the events you need to protect

When taking loan protection you can choose the level of insurance you need. Of course you could choose to take cover for both redundancy and incapacity together in one policy. You would then have cover to fall back onto if you should suffer from either of the events.

However should your lifestyle mean that you only wanted to protect against redundancy then you could just insure against this alone. For instance you could get a good sick pay plan from your employer.
You might also want to consider insuring just against incapacity alone and with the standalone provider you would be able to do so.

The event chosen would go towards setting the amount you would pay for your loan payment protection so this means you only pay for the protection you need.

Other types of protection to consider

While loan protection provides security for your loan repayments you might want to consider the alternative payment protection products. You could consider income or mortgage payment protection.
Income payment protection would give you an income you could choose to spend as you wanted. You would have the money to hand to pay any bills that dropped through the letterbox. You could keep your home warm and lit by maintaining your utility bills, you would also have the money to meet your rent and your food bill. In fact you could use it in any way that you wanted.

Mortgage payment protection provides security for the repayments of your mortgage instalment. You would insure up to so much of the repayment you pay each month and then receive this back each month. A policy could mean the difference between losing your home to mortgage arrears and being able to continue servicing your repayments each month.

Why loan insurance could be considered

Loan protection could be a better form of backup plan than risking being able to make a claim for State benefits. Firstly you would have to meet certain criteria in order to be eligible and this could mean not having any money in the bank over a certain amount. Should you have a partner who is working full time then it is likely you would also be ineligible to make a claim on the policy.

Even if you should claim money from the State you could still find yourself without an income that matched your own and you might have to wait for several weeks before you would see any money coming into the home. By this time you could already be behind on repayments and have red letters popping through the letterbox.

Getting a good deal on your policy

To get a good deal on your loan protection shopping around and comparing the premiums is essential. At the same time as comparing the cost of cover you should also compare the terms to ensure that you get the right type of protection for your needs. You might be able to make savings of as much as 80% on the premiums for protecting your loan.

When you take on the borrowing with the lender they will usually offer you loan cover at the same time. Historically they also charge high prices for the protection. In some cases at the moment protection is added into the amount you borrow and you pay interest on it. This will change when new rules come into force as lenders will have to wait 7 days before asking the consumer if they want cover.

Why you could consider a loan insurance policy

The income supplied from your loan protection would bring assurance that there would be a large amount of income each month to help you keep up your loan repayments when they were due. You would know how much would be coming into the home and for how long you would be able to rely on the payments. Without this income your unemployment of incapacity could be a great deal more stressful than it would have if you had protection to fall back onto. When taken out with the independent provider you would only need to pay for the events you wanted to protect against which of course would help to keep down the cost of the policy.

Loan protection Bristol cover can be taken out independently with a provider who sells nothing but payment protection insurance. If you choose to search for and compare the cost of insurance this way you could save a great deal of the cost of the monthly premiums when compared with taking the insurance with the lender on the high street.

How does loan payment protection insurance work?

You would take out loan protection Bristol insurance to ensure that if you were to become a victim to involuntary redundancy or incapacity you would have an income coming into the home which you could use towards repaying your loan outgoings. You would need to have been unemployed or incapacitated for so long before being able to claim on your insurance and begin receiving your tax free income and this would vary with providers as would how long you could continue claiming your benefits.

When might a claim be made on the cover?

Some payment protection providers allow you to claim on your loan payment protection from just the 30th day. However other providers you could have to defer from making a claim until the 90th day of your unemployment or incapacity. Should you need to stand to the longer period then you would of course have to find the money yourself during this time to continue repaying your loan outgoings otherwise you could fall into debt.

How much would my income be from the cover?

The amount of income that you would get back from your cover would be the amount that you had chosen to insure when you applied for the cover and which the provider pre-agreed to. This would be up to a certain amount of the repayment you have to make each month and this income would continue if needed for up to the full of the policy.
Your income from your policy could mean the difference between you being able to service your repayments or falling behind and into debt.

How long could the benefits continue?

You would either be able to claim an income, if needed, for a period of up to 12 months with some providers or for up to 24 months with others. You would get your benefits each month over this time, while they were needed, and then once the term was reached they would cease.

If the provider is offering you a policy that could payout for up to the 24th month then of course the monthly
premiums would take this into account and they would work out more each month.

Choose the events you want to protect against

You might choose to take out a loan protection Bristol policy to payout if you should suffer from either involuntary redundancy or incapacity. However the events that you choose to cover would go towards setting the monthly premiums so you could tailor them to suit your needs. You might just want to take out your protection to pay an income if you were to become a victim to involuntary redundancy on its own. You might choose to cover just incapacity if this should suit your needs more. This would mean that you are only paying out for protection that you actually need and which you want.

You could also check to find out if you have chosen a payment protection provider that is on the generous side to take out your policy with. If you have then you could claim for what is known as carer cover. Carer cover means that you would be eligible to claim on your insurance cover if you have to give up your full time position to stay at home and care for a family member.

Why consider paying out for loan cover?

You might be asking why should I pay out for a loan protection Bristol policy when I could claim an income from the State or use my savings to maintain my loan repayments. Savings could not last for the duration of your redundancy or incapacity which means you could go through them and still be left with a struggle to find money once they have been depleted. Should you consider applying for an income to continue repaying your loan outgoings from the State you would have to consider that often the money you might be entitled to receive might not match the income you are used to bringing home. This again could leave you with a struggle and could see you falling behind on the repayments as you would have to wait for several weeks to see any income even if you are eligible to claim.

When it comes to most forms of insurance, people tend to turn to some regular channels such as the phone and the internet to get protection for their car or home. But other forms of cover are a little bit more complicated and may be offered through different means. Loan protection in Wales is a good example, as it has been known to be attached directly on to borrowing. This means it can be important to understand how this kind of insurance works and where the best deals might be.

Loan payment protection insurance provides tax-free cash sums to policyholders who become unable to work because of involuntary redundancy, long-term illness, or injury after an accident. After somebody claims on their policy, they get monthly instalments towards their repayments for 12 to 24 months, or until they are back in work again, whichever happens sooner.

The purpose of this kind of insurance is to help somebody to keep up with their regular commitments even when they have no regular income, and specifically protects against unfortunate events which are beyond someone’s control.

Loan protection in Wales can be bought separately through independent insurance companies, but many people have ended up with this kind of deal after they were sold a cover plan by their lender or bank. This is often because the policy is sold at ‘point of sale’, or at the same time as the loan is arranged. It can sound tempting to take this up, and it is at least convenient, but many people may not realise that they can get similar policies elsewhere which may be much cheaper and just as effective.

In fact the Financial Services Authority has previously investigated the whole sector covering loan insurance, known as payment protection insurance, and fined a number of high street names who were found to have inappropriately sold this kind of cover. Circumstances included selling this form of insurance to people who did not need it or who did not actually qualify for a policy, such as people who were retired.

Lenders have also been known to add the cost of the insurance in to the loan, meaning the borrower is paying interest on the cover plan and the debt too. Furthermore, some people have ended up taking out this kind of deal because the lender in question has implied that they must take it out in order to be accepted for the loan, when in reality somebody is entitled to reject the lender’s offer of cover, qualify for the loan, and then perhaps get their insurance elsewhere.

More independent standalone insurance companies can offer loan payment protection insurance at as much as 80 per cent less than the policies offered by high street companies. In addition these deals may not only be just as effective, but possibly more so as some firms include extra options like backdating cover payouts to the first day somebody lost their income.

When looking for a loan protection Wales policy it is important to understand the basic aspects, as virtually all deals will pay out the tax free handouts should somebody lose their income due to involuntary redundancy, injury after an accident, or long-term illness. All of these circumstances can see somebody start to fall behind with a debt, which can affect someone’s credit rating and even lead to repossession of property if it is a secured loan.

The amount of the payout is often at the start of the policy, and people can often protect 100 per cent of their monthly instalments, up to a set limit. Virtually all forms of payment protection insurance have a point where the insurance company will not guarantee any more money per month, and this is often a set cash amount or 50 per cent of someone’s regular income, whichever amount is the smaller.

The size of the policy payouts will affect the cost of the premium, which is also often influenced by how long somebody would wait on their policy before a first payout arrives following a successful claim. The options are often 30, 60, or 90 days, and the shorter waiting periods often command the higher premium prices, but not always, so do check the policy terms and conditions.

Loan protection in Wales can prove poor value if bought in conjunction with borrowing but good value if bought separately from an independent provider – just as with car and home insurance, shopping around can be the route to peace of mind at a highly affordable price. Many people have also found this kind of cover takes a considerable amount of stress out of being unemployed or being off work due to ill health as it can ensure that they get decent support with what could be one of their most significant debts.