Is Loan Protection Nothing But A Rip Off

Is Loan Protection Nothing But A Rip Off



Is Loan Protection Nothing But a​ Rip-off?
Loan protection has been called many names including a​ rip-off .​
The negative slurs stemmed from an​ investigation by the​ Financial Services Authority in​ 2018 when it​ was found there was wide spread mis-selling of​ payment protection insurance (PPI) products .​
Many consumers were not being told how much the​ cover would cost in​ total,​ weren’t given any information about the​ exclusions which are in​ all policies and were being charged high premiums for inadequate cover or​ cover they couldn’t claim against .​
When bought incorrectly,​ the​ cover can indeed be nothing more than an​ expensive waste of​ money particularly if​ it​ is​ taken out alongside the​ loan with the​ lender at​ the​ time of​ securing the​ loan .​
However,​ going with an​ independent specialist can save you​ hundreds of​ pounds .​
Loan payment protection can when taken out with your circumstances in​ mind begin to​ give you​ an​ income which is​ tax free from between the​ 31st day and the​ 90th that you​ are out of​ work if​ you​ have suffered from an​ accident,​ an​ illness or​ if​ you​ have been made unemployed .​
It would then continue to​ give you​ security for between 12 and 24 months depending on​ the​ policy .​
The terms and conditions are always set out in​ the​ key facts along with the​ exclusions which can vary but there are some that are the​ same in​ all policies such as​ if​ you​ are in​ only in​ part time work,​ if​ you​ are self-employed,​ suffering from a​ pre-existing medical condition or​ of​ retirement age .​
The biggest problems associated with the​ payment protection sector has been a​ lack of​ knowledge regarding the​ products at​ the​ time of​ taking out the​ policy with very little if​ any information being given by the​ lender as​ to​ how much the​ total amount of​ cover will cost,​ the​ exclusions in​ a​ policy and that the​ consumer has the​ option of​ shopping around for the​ cover to​ get the​ cheapest premiums .​
The majority of​ loan cover bought is​ sold alongside the​ loan at​ the​ time of​ taking it​ out and it​ is​ these firms that received fines from the​ Financial Services Authority during the​ investigation .​
The problem with buying loan protection from the​ high street lender is​ that they have little experience in​ the​ product and selling it​ as​ opposed to​ the​ standalone specialist in​ payment protection who know the​ product inside out and pass their expertise onto the​ consumer.
The exclusions should be made clear at​ the​ time of​ buying the​ policy and presented in​ an​ easy to​ understand format instead of​ the​ technical jargon that is​ associated with policies .​
Fortunately the​ majority of​ standalone specialists will give you​ access to​ the​ information needed because they don’t put the​ huge profits that the​ high street lender puts ahead of​ what’s in​ the​ consumers best interest .​
Always make good use of​ the​ expertise that the​ specialist can provide so that you​ will not be let down in​ your time of​ need but instead have the​ security that loan protection should give.




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