Loan protection cover: Understand it before buying
- 21ST OCTOBER 2007
Loan protection cover can work the way it’s designed to do but you have to understand the limitations within a policy and these can be found in the exclusions. Some of the most common include being of retirement age, suffering from an on going illness or if you don’t work full time.
Providing you have access to the information so that you can decide if a policy is suitable for your needs then loan protection cover can begin to provide you with a tax free monthly sum after you have been out of work for a period of time. The waiting period can be anything from 31 days to 90 days and once cover has begun to payout it would continue to give you a tax free income for up to 12 months and, with some policies, for up to 24 months.
This income can give great peace of mind that if you should be out of work due to an accident, sickness or unemployment you would still have the money each month with which to meet your loan repayments and so not get into debt. However the cover can be expensive depending on where you choose to purchase the cover. If you take it alongside the loan then you would pay up to 80% more for your loan cover than had you gone with a standalone provider such as British Insurance.
British Insurance are one of the leading standalone specialists in loan protection cover and back up their policies with years of experience. Simon Burgess, Managing Director, is considered to be one of the good guys left in the sector and always warns the consumer to shop around for the cover. He advises: “Getting several quotes for loan protection cover and being aware of the exclusions is the only way to get a quality product. The majority of standalone providers will make sure that you have access to the vital information needed to make sure a policy is suitable for your needs.”
