If you have taken out any type of loan then you need to ensure that you are able to meet the monthly payments each month. If the loan is secured on your home then you are at risk of repossession if you fall behind on the repayments and cannot catch up. Unsecured loan debts can also see you being taken to court, and perhaps have to face the humiliation of bailiffs coming into your home to seize your belongings. Any form of debt will affect your credit status and your chances of obtaining credit could become virtually impossible. You could avoid having to face any of these worries if you take out loan protection insurance and if you take it with an independent provider then you can make some huge savings on the cover.
If you shop around and compare the cost of loan protection insurance you could save yourself as much as 80% on the premiums. The cost of cover would be dependent on your age when applying, the events covered and how much of the repayment you want to protect. All providers will state a maximum amount that you insure up to so your chosen sum would need to have the backing of the provider. This would be the sum of money that you claimed back, tax free, if you become a victim to one of the events you had insured against. You would need to wait for the deferment period to pass which would depend on the provider but would generally be in the region of 30 to 90 days from you first becoming unemployed or incapacitated. Some providers offer to date back your income to the first day of suffering one of the events so this would need checking in the small print. You would then enjoy payments for either 12 months or 24, receiving a payment each month if needed, and then the benefit would cease.
When taking a policy with the independent provider you can choose what events you want protection for. You can take full protection against unemployment and incapacity together in which case you would be eligible to claim should you become a victim to either of the events. You might just choose to take a policy to cover the possibility of unemployment alone or incapacity alone should this suit your circumstances better.
Loan protection insurance with the independent provider is an affordable way for the younger generation to take out cover. It is these individuals who often stretch their budgets to the maximum and who leave little over to pay out for expensive payment protection. If the provider offers payment protection that takes age into account this means the younger you are when you apply for cover the cheaper the policy will be. Redundancies and incapacity can happen at any time but with protection to fall back onto it lessens the worry.
Related Posts