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LOAN Protection Insurance
WITH PREMIUMS AS LOW AS £2.50 per
£100 of monthly cover |
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| DAY ONE COVER THIS MEANS
NO EXCESS PERIODS |
| SINGLE OR JOINT APPLICANT COVER AVAILABLE |
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Explaining Loan Payment Protection Insurance Cover
Those who have hit hard times can be easy prey for unscrupulous lenders,
and this is not solely because of the rates of interest they charge.
Banks and building societies invariably also try and sell borrowers
a product known as loan payment protection insurance cover, which covers
loan repayments for up to a year if policyholders are unable to work
as a result of illness, injury or involuntary unemployment.
Indeed, they have become notorious for automatically bumping up quotes
for monthly loan repayments to include the cost of loan payment protection
insurance cover.
There is nothing wrong with loan payment protection insurance cover
as such, just with the prices lenders impose to help fund the juicy
commission they receive from it. The major High Street banks can charge
a staggering five to ten times as much as the best independent specialist
loan payment protection insurance providers.
So don’t be kidded into thinking that you are somehow obliged
to buy loan payment protection insurance cover from your loan provider.
Shopping around can save thousands of pounds over the borrowing period
and it can also secure you more flexible and better quality loan payment
protection insurance cover.
Loan payment protection insurance cover policies provided by lenders
often require a single premium which is front loaded and non-cancelable
and only start paying claims after an initial 60 day exclusion period.
The loan payment protection insurance cover specialists, on the other
hand, can offer a monthly contract that can be cancelled by the consumer
at any time and which pays out from day one of a claim.
Unlike many lenders, the loan payment protection insurance cover specialists
can also allow policyholders to take incapacity or involuntary unemployment
cover in isolation at a reduced cost.
As long as you are buying from the right source, there can undoubtedly
be a strong case for taking out loan payment protection insurance cover,
because loan repayments will still have to be made if you are unfortunate
enough to be made redundant or to become unable to work on health grounds.
Don’t forget that you will also have to meet other essential outgoings
like housing costs and utility bills, even though you won’t have
an income.
State benefits won’t even be sufficient to scratch the surface
of your financial problems, and taking out further loans to repay existing
ones is one of the surest ways of ending up in the bankruptcy courts.
Nevertheless, be aware than even loan payment protection insurance policies
sold by the very best loan payment protection insurance specialist providers
are not necessarily suitable for everyone.
For example, all loan payment protection insurance cover is likely to
be of debatable value to those in poor health because it does not cover
medical problems you already have when you take out your loan payment
protection insurance policy.
It can also be of limited interest both to those working in industries
where voluntary redundancy - which is excluded - has become a popular
downsizing tool and to the self-employed, who are only able to claim
for involuntary unemployment if they permanently cease trading.
But with leading loan payment protection insurance specialists able
to charge as little as £2.50 a month per £100 of monthly
loan repayment covered and with premiums unaffected by factors such
as age, medical history or smoking habits, the majority of borrowers
will probably decide they can’t afford to be without loan payment
protection insurance cover.
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