Loan protection security can be taken out to protect the repayments of unsecured or secured loans. You would be eligible to claim on your policy if you then became a victim to unemployment or incapacity if you chose to protect both events. You would get an income after a period of time which the provider would set and benefit would then continue for up to the term if it were needed.

With some providers you might be eligible to make a claim after just the 30th day of first becoming unemployed or suffering incapacity. However with others you could need to wait for 60 or 90 days before making your claim. Once a claim had been made on the policy you are then able to continue to make a claim for either 12 or 24 months after which time the benefit would simply cease regardless of your current circumstances. If you were to take protection paying out over the longer term then of course the premiums would cost more. You should also spare some thought to the fact that 90 days could be a long time to manage without any income as by the time you were able to claim your income you could be in arrears by some 3 months already.

With loan protection behind you to fall back onto you would be able to use the income supplied from the policy to go towards your repayments each month. Secured loan repayments that you fall behind on can cause a great deal of stress as they could lead to the individual losing their home if they were unable to catch up on the payments that were missed. If you fell behind on unsecured loans you could also be taken to court and you could end up having bailiffs come into the home to take your possessions so they could be sold. A policy can ease these worries and as you are able to continue servicing your repayments your credit file would also be maintained.

Loan protection could be taken out to suit your personal needs. You can take out a policy that would payout in the event of suffering either unemployment or incapacity. However if you got a good sick pay plan from your employer then you might just want to consider protecting your repayments against the chance of you being made redundant. Should you consider savings or redundancy money to be your back up plan if you are made redundant then you might just choose to take out protection for incapacity alone? Your chosen events would go towards how much you need to pay for the protection so you would only be paying out for the protection that you actually want. However, spare some thought to the fact that your savings could run dry in the time it might take you to find work or to have recovered and got back to work.

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