A loan payment protection insurance policy is cheaper when bought with a standalone provider
- 5TH NOVEMBER 2007
When it comes to taking out a loan payment protection insurance policy then you do have choices, however the majority of consumers do not realise they have the option of taking out the cover independently as opposed to taking it out alongside the loan with the high street lender.
The high street lender makes profits of billions each year by adding loan payment protection onto the cheap loans they sell. While this might be one of the easiest ways of buying the cover it is also the most expensive and it can boost the cost of the loan up considerably, however some lenders will all but insist that the cover has to be taken out with the loan and others even add it onto the loan without the consumer’s knowledge.
A loan payment protection insurance policy taken out with British Insurance, who is an independent specialist in payment protection can be up to 80% cheaper when compared with the high street lender and along with this they give the consumer help and advice and point out the exclusions which could mean a policy would not be in the consumer’s best interest. Common exclusions include being retired, self-employed, if you suffer from a pre-existing medical condition or are only working part time these can be found in the small print of a policy and it is essential that you read and understand them before buying a loan payment protection insurance policy.
Providing you understand the product it can then begin to give you the money each month which would be tax free so that you can continue paying your loan repayments and so not get into debt. Cover would begin to payout if you should come off work after suffering from an accident, illness or through unemployment caused by such as redundancy.
You do however have to be off work for a pre-determined amount of time and this can be from the 31st day or as long as the 90th day and could then continue for between 12 and 24 months depending on the provider. Cover taken with ethical British Insurance would begin from the 31st day and continue paying a tax free income for 12 months and this is determined in the key facts of a policy which British Insurance makes available to the consumer before they buy, so that they can make an informed decision regarding the suitability of a plan.
You do have to go over a policy with a fine tooth comb because they can be filled with technical jargon which often confuses the consumer and it is important that you understand the product you are buying if you expect it to work the way it was designed to work. The products have caused much concern in the past since the investigation into the sector began in 2005 after a super compliant to the Office of Fair Trading and the Financial Services Authority began investigating the sector, handing out fines to several well known high street names who were mis-selling the cover alongside their loans and credit cards.
Faith has been lost in the product which has seen a decline in the cover being taken out which is leaving many people without any protection if they should find themselves without an income, with debt on the increase it is essential you do have a back up plan on which to fall back on and a loan payment protection insurance policy taken with an ethical specialist such as British Insurance can be that safety net.
