If you take loan protection with an independent provider then you can make huge savings on the cost of your policy. In some cases you might be able to save up as much as 80% on the premiums when compared with the lender on the high street. Loan cover is taken out by those who have taken on secured or unsecured loans to ensure that if they became incapacitated or unemployed they would still have an income coming into the home each month.

When taking out loan protection you would need to decide how much of your repayment you wanted to cover. This is the amount you are paid back if a claim should have to be made and the income would be tax free over a period of so many months. Usually providers offer 12 monthly payments of benefit and then cover ceases but some will offer 24 months of benefit, if you were to have to claim for this length of time of course. There would also be a period of deferment which is generally in the regions of 30 to 90 days. This is the amount of time that you would have to have been redundant or incapacitated before a claim could be made. Some providers will also date back your income to the first day of you losing your income to one of the events.

While your loan payment protection can be taken to safeguard both unemployment and incapacity together you could choose to tailor the policy to suit your lifestyle. For instance you might just want to protect against unemployment alone or you could just want cover for incapacity alone. The amount of protection needed would go towards determining how much your premiums would cost. If your provider is generous then they might also pay out on the policy for carer cover. This would mean that if a loved one should need you to take care of them due to incapacity on their part you would have an income to maintain your repayments while being their carer.

Loan protection should be considered for any type of loan but if you have a secured loan then it is essential. If you did not have a policy to fall back onto to provide you with an income then you could easily fall behind on the repayments of your secured loan and this means that you could end up losing your home. Also bear in mind that if you are unable to repay unsecured loan debts then you could end up in court and have bailiffs sent to your home to seize your possessions so they can be sold.

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