Take your loan payment cover the right way
- 15TH SEPTEMBER 2007
When it comes to taking out loan payment cover then it has to be done the right way if you are to make sure that you would be able to claim against the policy in your time of need. When taken correctly is can mean the difference between you having peace of mind that you would be able to repay your loan or worrying and struggling to find the money each month.
Loan payment cover can give you a tax free monthly income to ensure that you can afford to pay your monthly loan repayments and would typically start to pay out 30 days after you have been out of work. It would continue to provide you with the income needed to meet your loan repayments each month for up to 12-24 months. Cover can be taken to insure against accident and sickness only, unemployment only or to cover all three together.
Loan payment cover has received a lot of bad publicity over the last few years after it was found that there had been wide spread mis-selling of the product which left many people unable to claim on their policy. The main culprits were the high street lenders who sell the protection as an add-on product alongside loans and credit cards.
The biggest problem that caused the mis-selling was that very little, if any, information was given regarding the product’s suitability and the person’s circumstances not questioned before the cover was bought. Another problem is that the high street lender has been known to deliberately mislead the consumer into thinking that the cover has to be taken out alongside the loan and this is something the Managing Director of specialist provider British Insurance, Simon Burgess would like to see changed.
Simon is often quoted as saying the high street lender rips off the consumer and when you take into account that the products they sell are inferior to those bought from a specialist provider and that consumers are charged an arm and a leg for the cover, he is right.
The right way to take out loan payment cover is by getting several quotes from independent specialists, this will ensure that you have the cheapest premiums along with the best advice and the essential information needed to ensure that a policy is in your best interests.
