Loan Protection Can Work If You Take The Time To Understand A Policy

Loan Protection Can Work If You Take The Time To Understand A Policy

Loan Protection Can Work If you​ Take the​ Time to​ Understand a​ Policy
Loan protection,​ or​ ASU insurance as​ it​ is​ also known,​ can be taken out by those who have monthly loan repayments to​ make and who are in​ full time employment and worry that they might find themselves out of​ work due to​ suffering from an​ accident,​ prolonged sickness or​ through such as​ unemployment.
Providing you​ have made sure that loan protection would be suitable for your needs then it​ would begin to​ payout after a​ pre-defined period of​ time of​ the​ policyholder being out of​ work continually which can be between 31 days and up to​ 90 days with some providers.
The majority of​ policies are backdated to​ day one and would then continue to​ give you​ a​ tax free income for up to​ 12 months and with some loan protection policies,​ for up to​ 24 months .​
You do have to​ make sure that a​ policy would be suitable for your circumstances as​ the​ cover isn’t suitable for everyone but providing that it​ is​ then it​ could give you​ peace of​ mind and help to​ keep you​ debt free .​
Some of​ the​ most common exclusions include only being in​ part time work,​ retired or​ suffering from an​ illness at​ the​ time of​ taking out the​ policy.
Loan protection has in​ the​ past caused confusion and while some changes for the​ better have risen,​ many more changes still need making .​
The majority of​ policies that are sold alongside the​ loan from the​ high street lender have been sold without the​ consumer being fully aware of​ what they are buying and don’t realise a​ policy has exclusions within it​ or​ the​ total cost of​ the​ cover when added onto the​ loan.
In 2018 the​ Financial Services Authority began investigating the​ sector after a​ super complaint was made to​ the​ Office of​ Fair Trading (OFT)_ .​
Following this they handed out fines to​ several high street names before the​ OFT’s referral of​ the​ sector to​ the​ Competition Commission .​
They are reviewing the​ loan protection and payment protection insurance industry and are expected to​ reach their conclusion in​ February 2009.
If you​ want the​ protection and peace of​ mind that loan protection can bring then make sure you​ understand the​ product and what it​ is​ capable of​ doing and stick with standalone providers of​ loan protection and payment protection insurance for the​ cover.

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