Loan Payment Protection Insurance Worth The Cost

Loan Payment Protection Insurance Worth The Cost



Loan Payment Protection Insurance – Worth the​ Cost?
Nowadays,​ every time you​ apply for a​ loan you​ will most likely be offered payment protection insurance .​
If you​ are taking out a​ particularly large loan,​ the​ idea may seem very attractive .​
These insurance policies will take over repayments on​ your loans in​ the​ event of​ losing your job or​ being involved in​ a​ medical emergency .​
But what are the​ true costs and benefits of​ this type of? Given that over a​ billion pounds is​ spent in​ Britain on​ this kind of​ insurance annually,​ it​ is​ worth asking yourself .​
The Cost Of Insurance
The fact of​ the​ matter is​ that the​ lending industry has become more and more competitive in​ recent years .​
With interest rates getting lower and lower,​ lenders have sought to​ find out ways of​ increasing their returns .​
One of​ the​ ways they have come up with is​ to​ offer various additional products that accompany the​ loan,​ such as​ payment protection insurance .​
What may come as​ a​ surprise is​ that payment protection can often cost as​ much as​ the​ loan interest repayments .​
The payment protection repayments can,​ incredibly,​ effectively double the​ cost of​ the​ loan .​
With such startling consequences,​ it​ is​ imperative that consumers think carefully before opting for such options .​
Peace of​ Mind?
Many people will hold the​ view that as​ lives and jobs become more and more unstable,​ the​ peace of​ mind offered by such policies are worth the​ price .​
In some cases this is​ true,​ but not always .​
Every insurance policy varies,​ but one thing remains the​ same,​ it​ is​ very difficult to​ get an​ insurance policy to​ pay out .​
You should look very carefully at​ the​ fine print of​ your policy and you​ will be amazed to​ find out what actually is​ covered,​ and what exclusions and exceptions apply .​
For example,​ unemployment protection may only kick in​ after a​ certain period of​ unemployment,​ will not count if​ the​ unemployment was voluntary,​ and can require proof that the​ applicant has actively sought employment,​ and not turned any down,​ for the​ period since losing their job .​
This will give the​ insurance company literally dozens of​ reasons for refusing pay out in​ most instances .​
Don’t Accept the​ First Quote!
As well as​ these conditions,​ you​ should also shop around .​
The person you​ are borrowing from will always offer you​ a​ policy,​ but this unlikely to​ be the​ best policy available and a​ little shopping around will go a​ long way .​
You will probably also find your self better terms or​ terms that suit your needs more closely .​
Government standards are in​ place to​ make sure such policies are clear and in​ plain language,​ but complaints are still pouring into consumer protection groups regarding these policies .​
The basic advice here is​ be very careful if​ opting for expensive insurance policies .​
Make sure you​ understand the​ terms,​ and that you​ think they might be of​ benefit to​ you,​ and if​ you​ don’t want the​ policy,​ just say no.




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