Wouldn’t it be great if we could look into the future and know exactly what was ahead of us? Life would be so much easier when it came to planning financial matters for one. Of course this is only a dream and we have to accept what happens when it happens. If this involves being made redundant or becoming sick or suffering an accident and you have such as loan repayments to maintain then life can become very hard. While you can predict the future you can safeguard against it by taking out loan payment protection insurance.
Loan payment protection insurance would allow you a replacement income each month you were unable to work or were looking for work, up to the term offered by the provider. You would be able to choose this amount, up to a limit, and it would be tax free and go a long way towards you being able to keep ahead of your loan repayments. You could make a claim between the 30th and the 90th days of unemployment or redundancy depending on the terms offered by your provider. This would need checking when comparing the cost of cover as would how long the income would last. Some providers might pay 12 monthly payments while others could offer 24 monthly payments. After this time the cover would simply cease paying out regardless of your situation.
The consequences of missing loan repayments can be diverse depending on the type of loan you have taken out. If you have taken out a secured loan then of course your home would be at risk by failing to keep up with your loan demands. Unsecured missed payments could see you being taken to court and the judge could order bailiffs into your home to seize your belongings. All missed or even late loan repayments are recorded on your credit file and this is one of the things that affects your chances of borrowing in the future.
There are many benefits to taking out loan payment protection insurance with an independent provider. One is the savings you can make on the cover and these can be up to as much as 80%. The other is the flexibility of the policy. You can choose what events you want to take protection out for. Of course a policy can be taken against unemployment and incapacity together and in this case you would be eligible to make a claim if you were to suffer from either of these events. However should you get full sick pay from your employer then you could just choose to take a policy against unemployment alone. Alternatively if incapacity protection would suit you better then you could just choose to take this out as a standalone policy. As the level of cover goes towards setting the premiums, you are only paying for cover needed.
Related Posts