Stick with specialist advice for your loan protection plan
- 9TH OCTOBER 2007
If you want to know all that you need to know about a loan protection plan then it is essential that you go to a specialist in payment protection insurance (PPI). Loan payment protection plans can be a financial safety net but you have to realise that they do have exclusions and this could stop you from claiming on a policy, meaning that it isn’t suitable for your circumstances.
When taking out a loan protection plan from a standalone specialist provider such as British Insurance, then the loan protection plan can give you a tax free income once you have been out of work for 31 days. However, with some providers it can be up to 90 days before payout begins. Once the cover has begun to payout then it would continue to do so for up to 12 months, though some providers cover for up to 24 months, which gives you peace of mind that won’t fall behind in your loan repayments and get into debt.
While the loan protection plan would pay if you should come out of work due to suffering from an accident, sickness or through unemployment by such as redundancy there are exclusions in a policy which means it wouldn’t be suitable for your needs. For example, if you suffer from an illness at the time of taking out the policy, are retired, or are only in part time work then a policy wouldn’t necessarily be in your best interests.
Simon Burgess from British Insurance has always warned the consumer about policy exclusions and the way that the high street lender “exploits” the customer and welcomed the intervention of the Financial Services Authority when it began investigating the sector in 2005.
Fines were handed out to several high street names for mis-selling and the sector was then refer to the Competition Commission who are conducting an in-depth inquiry into the loan protection plan industry which will be revealed in February 2009. Still in the hands of the Financial Services Authority, their latest investigation sadly revealed that mis-selling is still occurring with the high street lenders not giving out the vital information needed to ensure that a policy would be suitable for their needs.
British Insurance makes this information available in plain English so that you know whether a loan protection plan would be suitable for your circumstances. If you want the safety net that loan protection can provide then you have to shop around for your policy with a standalone specialist provider.
