Where would you take out loan payment protection if you had the choice? Would you take it in with the loan at the time of borrowing and pay interest on the protection and the amount you borrow? Or would you take it with an independent payment protection provider and make savings of as much as 80% on the protection and pay monthly premiums for the insurance?

If you choose to shop around for your loan payment protection then you can choose how much of your loan repayment you want to protect. The amount chosen would be agreed by your payment protection provider and it is the amount that you would be given back each month if you had to make a claim due to one of the events you had chosen to protect. The payments would be tax free and you would receive them once you had been made redundant or incapacitated for a period of between 30 days and 90. Once you have started to receive them they would last for either 12 months or 24 months and then they cease. Some providers will also offer to date back your cover to the first day of you becoming redundant or incapacitated so this would need to be checked before you take out the protection.

With the benefit from your policy behind you, you would not have to worry about finding the whole repayment each month as you would have a substantial sum towards being able to maintain your repayment. If you had nothing to fall back onto then life could become very difficult and this could hinder your search for work or recovery. However even when considering making the most drastic of cutbacks you might still be unable to find the money needed to meet the demands of your loan repayments each month.

If you were to become unable to meet your loan repayment demands then of course consequences need to be faced and these would depend on the type of loan you had taken on. If you had secured the loan on your home you are at risk of losing it by falling behind on your repayments. Should you fall into debt with unsecured loan debt you could still be taken to court so the lender can try to get back the money you owe. This could mean your belongings could be taken so the lender can get their money back.

You would be able to choose the level of loan payment protection insurance needed. While you might want cover for unemployment and incapacity together you do not have to cover both events. You could just choose to take out unemployment protection if this suited your lifestyle better. You could also take protection solely to protect against incapacity if this suited your lifestyle better. The level of insurance chosen would go towards how much you pay for the insurance as would your age when you apply for protection and the amount of your loan repayment you choose to protect.

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