The Pros And Cons Of Loan Protection Insurance

The Pros And Cons Of Loan Protection Insurance



The Pros And Cons Of Loan Protection Insurance
Loan protection insurance has come under fire recently as​ a​ result of​ Financial Services Authority and Office Of Fair Trading investigations and the​ subsequent referral to​ the​ Competition Commission .​
Some consumers and financial commentators have denounced it​ as​ a​ poor value product,​ and it​ may be in​ terms of​ the​ cost of​ premiums that some providers,​ but the​ actual theory behind loan protection insurance is​ extremely advantageous and beneficial.
There are certain positives and negatives associated with loan protection insurance that may enable an​ individual to​ make up his or​ her mind as​ to​ whether loan cover is​ needed or​ not .​
Neither the​ positives nor the​ negatives may be immediately obvious because of​ the​ bad press the​ payment protection insurance industry has received in​ the​ past couple of​ years .​
However,​ loan protection insurance should be looked at​ impartially until an​ individual knows all of​ the​ facts.
In terms of​ positives,​ loan protection insurance can provide infinite peace of​ mind .​
The last thing you​ want to​ worry about if​ you​ lose your job is​ whether or​ not you​ will be able to​ pay off your loan .​
With loan protection insurance,​ you​ do not need to​ worry at​ all .​
It will pay off up to​ twelve to​ twenty-four months’ of​ repayments over that period of​ time,​ thus removing the​ worry for you​ .​
The product itself can be of​ great value in​ such circumstances .​
There are also standalone policies that can be paid monthly,​ thus not stretching your budget too much.
However,​ amongst the​ negatives is​ the​ fact that many individuals may actually end up paying more for their loan protection insurance because some providers add it​ to​ the​ loan total,​ which thus increases the​ repayments made .​
Also,​ loan protection insurance may represent poor value for some consumers because it​ is​ not relevant for everyone .​
If you​ work less than sixteen hours a​ week,​ for example,​ you​ would not be eligible to​ claim,​ and you​ may not have been told this when you​ took the​ policy out .​
It is​ up to​ every individual to​ weigh up the​ pros and cons before taking out loan protection insurance and to​ seek independent advice if​ necessary.




Related Articles:




Powered by Blogger.