A loan protection plan can work for you
- 11TH JULY 2007
Despite the fact that loan protection has been seen in bad light recently with high profile reports of mis-sold policies and price-inflated premiums, a loan protection plan can work for you when purchased correctly. A loan protection plan means that you take out cover to safeguard the possibility that you might suffer from an illness, unemployment or accident that leave you unable to repay your monthly credit commitments.
If this should happen and you can’t work for 30 days or more then, with some policies, such as those provided by the ethical, standalone provider Simon Burgess, the cover will pay back to day one and give you a sum of money every month to make sure you can repay your commitments.
There is no denying that for many people their loan protection plan has fallen far short of what they expected, however the majority of these have been bought from the high street bank alongside the loan. The Financial Services Authority is investigating the sector and it has now been passed onto the Competition Commission and it is hoped that changes for the better will come from it.
A loan protection plan can only work if it is suitable for your circumstances and in the majority of cases the high street banks and greedy lenders put profits above the consumer’s best interests.
This is something which Simon Burgess from independent and specialist payment protection provider British Insurance is always proclaiming and will continue to do so, urging consumers considering buying a loan protection plan “to shop around and buy from an independent provider. Don’t automatically accept your loan providers’ policy - in most cases you will be paying up to 80% more for the cover than you need to, and for mediocre protection”.
