Would you be able to maintain your loan repayments without loan protection to fall back onto? If you became unemployed or incapacitated and lost your income and you could not manage to find the money each month to continue servicing your loan repayments then you would of course have to face the consequences of missed payments. With loan payment protection you would have an income that would be tax free each month for up to the term of the policy which you would put towards your repayments.
This income might be claimed once you have been unemployed or incapacitated for a period of just 30 days and with other providers you could be expected to wait for up to the 60th or even the 90th day. You might want to ensure that you could claim from just the 30th day as you could fall into debt by 3 months and the lender could be sending out letters. Once you have claimed on the policy you might be able to claim for up to 12 months with some providers should you need to make a claim for that length of time. However there are some that would offer you a policy that could continue to provide an income for as long as 24 months. Should you have a policy that continues for this length of time then you do pay more in premiums. However once a policy had reached its term it would cease regardless so this would need considering.
You might choose a policy that would pay out if you suffered from either of the events. You could also just choose to insure against redundant alone or you might choose just to take out a policy that would pay out in the event that you became incapacitated. Also check with the provider you are taking out your cover with as some if they are generous could offer a policy which you could claim on if you were to have to stop working due to taking care of a loved one. Carer cover can be a great additional form of security.
Loan protection would come with some exclusions so this would have to be checked with the provider as some include more than others. The exclusions do have to be checked against your lifestyle as they could stop you from being able to make a claim on the insurance. For instance you would have to be in full time work when taking out the cover and you do need to have been working for a certain amount of time when applying for the policy.
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