Changes afoot to help make choosing loan cover easier
- 8TH NOVEMBER 2007
There have been many problems associated with loan cover dating back from 2005 when an investigation by the Financial Services Authoritybegan after a super complaint by the Citizens Advice to the Office of Fair Trading and it was found that there had been wide spread mis-selling of payment protection insurance (PPI).
One of the biggest problems in the sector is the lack of information at the time of buying the product, to start with there are exclusions in all policies that can stop you from making a claim with some common to all policies. If you only work part time, are self-employed, retired or suffering a pre-existing medical condition a policy would not be suitable for your needs. It is essential that you read the small print of a policy to determine if it is suitable for your circumstances because exclusions can vary and depending on where you buy the cover will all depend on the amount of information you are given.
Buying loan cover with a standalone provider is the best way to gain access to the information you need along with savings money on the premiums, British Insurance can save you as much as 80% on a loan insurance policy that would begin to payout from the 31st day of being out of work and would continue to give you an income for up to 12 months.
However some loan cover providers will not payout until 90 days after the event, so do check the small print for clarification.
One of the biggest changes to the sector will occur in March 2008 with the introduction of comparison tables. The table will allow the consumer to choose the right cover by answering a series of questions, along with this it will tell them how much the cover will cost and will mention the exclusions within the policy. The Financial Services Authority hopes that this will open up the cover and make it easier for the consumer to determine if the product is suitable, along with giving them the advice and information needed to ensure they take out the right type of loan cover for their circumstances.
