Loan protection cover could stop you getting in to debt
- 17TH SEPTEMBER 2007
If you have monthly loan repayments to make it is essential that you keep up the repayments if you don’t want to get a bad name and a bad credit rating, the repayments will still have to be made if you were to find yourself out of work and unless you have given loan protection cover some serious consideration, you could find yourself in big trouble.
Loan payment protection insurance - or ASU insurance as it is also known – would, providing you meet the requirements in the policy, pay out a tax free income each month if you should come out of work due to accident, sickness or unemployment. This would ensure that you would still be able to meet your loan repayments. The policy would typically begin to pay out after you had been out of work for 30 days and be back dated to the day you came out of work and would give you peace of mind for up to 12 months and with some providers for up to 24 months.
Loan protection cover has to bought carefully and while the lender will try to push it alongside a loan, the cover doesn’t have to be bought this way. There are independent payment protection specialists who only sell payment protection products and as such know the product they are selling and will make sure that you get the information you need in order to be able to make an informed decision.
In 2005 a huge investigation in to the sector was started after a super complaint was made by the Citizens Advice to the Office of Fair Trading (OFT) about mis-selling of payment protection products. The Financial Services Authority also looked in to the sector and has to date fined several big names in the industry.
There has been changes made already thanks to the investigation and it is hoped that many more will arise. One of the changes for the better is the way that loan protection cover is sold online. Previously when sold alongside loans lenders used a pre ticked box and if they didn’t want the cover then it was down to them to un-tick the box. This led to confusion for many consumers and cover was bought that was either not wanted or couldn’t be claimed on successfully, thankfully now many lenders have agreed to change the way that the cover is sold.
If you want to have peace of mind of covering your loan repayments then it is essential that you shop around for your policy and get several quotes from standalone providers such as British Insurance. British Insurance have won best-buy awards for their protection products and always put the consumer’s best interests first. Loan protection cover can give peace of mind but only when the product is bought to suit your needs, buy independently and with care.
