If you have taken out a loan then you probably already know about loan payment protection. You could already have it included with your loan but if you have taken it with the lender then you could be paying way over the odds for it. If you are considering taking out a loan then you should be aware of the fact that you can choose to shop around and take your policy independently with a specialist provider. By choosing this option you can save a great deal on the cost of the policy and have more control over such as how much you want to protect each month and the events you want to cover.

The amount you choose to cover when taking out loan payment protection is the amount you get back each month and the payments are tax free. However all providers will set a limit to the amount you can insure up to so this should be checked, this amount would go towards setting the premiums you pay. You would have to wait for a period of time of being unemployed or incapacitated before you can make a claim on the insurance and this would depend on your provider. Some providers will offer to payout on your cover once the 30th day has passed while with others it could be up to the 90th day before you can claim. You should be able to check the terms in the small print and also check how long you would benefit from your cover as some providers offer 12 months of payments and others could offer 24 monthly payments.

When comparing the cost of the cover this is important as you should be comparing like for like. For instance a policy that would continue to payout for 24 months would cost a great deal more than one paying out for 12 months. 12 months of cover can be more time than is needed for you to have found work or for you to have recovered and being able to get back to your own job. However weigh up the fact that the cover would cease at this time regardless of your circumstances when the term has been reached.

You can choose to take out protection to cover both unemployment and incapacity together in which case you would be able to make a claim on your cover if you were to suffer from either of these events. If you just want to protect against incapacity alone then you would be eligible to claim if you suffered an accident or an illness that meant you were unable to work. Should you want security against redundancy alone then you could just take this out as a standalone policy. With loan payment protection behind you to fall back onto you would have peace of mind that if the unknown were to happen you would have financial security behind you to help you to maintain your repayments and stop you from falling into debt. Without it you could have a struggle on your hands to be able to meet these outgoings and have to face the consequences.

Related Posts

• Choose income protection to suit your lifestyle
• Taking out mortgage cover independently
• Where would you get the money from without mortgage protection?
• Check the contents of mortgage insurance cover before buying
• You can get a mortgage payment insurance policy cheaper when you get an independent quote