If you want peace of mind that you would be able to maintain your loan or credit card repayments if you lost your income, consider loan payment protection. Loan protection could give you a safety net on which to fall if you were to become unemployed. It would also protect against being unfit for work due to suffering illness or accident.
You would have to wait a period before putting in a claim. You must be continually unfit or unemployed for between 30 and 90 days. Once the policy had commenced paying out it would then provide benefit for between 12 and 24 months. The income you would receive would be tax-free and would allow you to concentrate on recovery or to find another job. Peace of mind during this time is essential and loan payment protection can give this.
A policy will vary depending on where you choose to take it. Buying from the high street lender alongside the borrowing is often the dearest choice for protection. High street lenders rake in around £4 billion each year in profits. They are able to do this by charging sky-high premiums that can almost double the cost of a cheap loan. Independent specialist providers offer cheaper premiums and put the consumer ahead of huge profits. Another benefit is that they provide all the information needed for the consumer to be able to choose cover that would work for them.
Faith in payment protection products hit an all time low after the Office of Fair Trading received a super complaint from the Citizens Advice in 2005. Following this, fines were handed out to several high street names by the Financial Services Authority. The Financial Services Authority also set out guidelines when it came to selling cover. The latest improvement that will be seen is the introduction of comparison tables.
Comparison tables will make loan payment protection and the related products more transparent. They will highlight exclusions, the cost of the policy and help the individual to choose which type of cover would be most suitable. Loan cover is just one form of payment protection; there is also income protection and mortgage protection. The individual will be able to answer a series of questions that will then lead them to choosing the right product.
Loan payment cover can be a valuable product despite the negative aspect of mis-selling. The consumer should realise that it is not the products themselves that should be blamed when it comes mis-selling. The problem of mis-selling lies with those firms who fail to provide the consumer with the information needed. Payment protection is known to be filled with technical jargon and unless this is converted into plain English, the majority of consumers do not understand it.
An ethical specialist will not only save you money on the premiums for cover. They will provide the consumer with the information needed on their website. This will be offered by way of FAQs and articles. Before buying your loan payment protection be sure to take advantage of the information that is on offer.
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