Make Sure You Understand Loan Insurance

Make Sure you​ Understand Loan Insurance
Loan insurance can be a​ safety net but it​ has to​ be bought with your circumstances in​ mind .​
Loan insurance has been in​ the​ spotlight for all the​ wrong reasons recently and one of​ the​ main problems with it​ is​ that for the​ majority of​ consumers it​ is​ hard to​ understand .​
Many people who have bought the​ cover don’t realise how much they are paying for it​ or​ what is​ involved in​ a​ policy,​ for instance the​ exclusions .​
Loan insurance – sometimes known as​ ASU insurance due to​ the​ cover protecting a​ loss of​ income against accident,​ sickness or​ unemployment - will give you​ an​ income which is​ tax free once you​ have been out of​ work for a​ defined period of​ time which can be from the​ 31st day of​ being out of​ work or​ as​ long as​ the​ 90th day depending on​ where you​ choose to​ buy your cover .​
Loan insurance can work and give you​ an​ income which will ensure that you​ can make your loan repayments each and every month without the​ worry of​ where to​ find the​ money and stop you​ from getting into debt,​ providing you​ understand it .​
However you​ do have to​ be aware of​ the​ exclusions in​ a​ policy and the​ most common are if​ you​ are retired,​ only in​ part time employment or​ if​ you​ suffer from an​ illness at​ the​ time of​ taking out the​ policy .​
These are just some of​ the​ reasons which means you​ could be ineligible to​ make a​ claim and it​ is​ essential that you​ check the​ small print out of​ every policy you​ are interested in​ buying.
In 2018 the​ Financial Services Authority began an​ investigation into the​ sector and handed out fines to​ several high street firms and although some changes for the​ better arose,​ many more changes still need making .​
During the​ latest investigation it​ is​ still clear that firms aren’t making the​ product any easier for consumers to​ understand and now the​ Chief Executives of​ the​ firms targeted will receive personal fines if​ the​ consumer’s best interests aren’t taken into account when selling loan insurance .​
Stick with a​ standalone provider and understand the​ product and loan cover will be an​ invaluable safety net.

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