When Should You Get Loan Insurance

When Should You Get Loan Insurance

When Should you​ Get Loan Insurance?
Loan insurance is​ a​ product that everybody will be offered when they buy a​ loan,​ or​ might even have included in​ their loan package without them really knowing about it .​
If you​ are in​ the​ process of​ looking for a​ loan or​ want to​ know more about loan insurance,​ then this article will help you​ to​ decide which policy if​ any is​ right for you.
What is​ loan insurance?
Loan insurance is​ often referred to​ as​ PPI,​ or​ Payment Protection Insurance .​
Loan companies will urge you​ to​ get this insurance to​ cover yourself in​ case you​ cannot keep up with your repayments due to​ accident,​ illness or​ unemployment .​
The terms of​ these loan insurance policies varies from one company to​ another,​ and you​ should check out the​ policy thoroughly before signing anything.
What are the​ advantages?
The obvious advantage of​ loan insurance is​ that if​ anything should happen to​ you​ that stops you​ from keeping up with repayments,​ your loan insurance might be able to​ help you​ pay off some of​ the​ debt .​
This gives you​ peace of​ mind,​ knowing that you​ are covered if​ the​ worst should happen .​
It will cost you​ a​ fair amount of​ money,​ but if​ it​ keeps you​ covered against possible default if​ you​ are taken ill and cannot work,​ then it​ is​ probably worth the​ money .​
But is​ it​ really that simple?
Problems with loan insurance
Although there are cases when loan insurance is​ appropriate,​ there are many cases where you​ will not be covered by your policy .​
For example,​ many self-employed people will never be covered by their policies when they are unemployed,​ unless their company has completely ceased to​ trade .​
The criteria for cover are very strict,​ and you​ may find that there is​ very little in​ the​ policy that will apply to​ you​ and your circumstances.
Are there alternatives?
There are alternatives to​ loan insurance,​ with the​ main one being not to​ get the​ insurance at​ all .​
The insurance can add a​ significant amount onto the​ loan price without giving you​ many benefits .​
However,​ if​ you​ feel that you​ need cover then look for an​ independent insurance policy for your loan,​ which is​ generally cheaper .​
Also,​ you​ can check your other current insurance policies to​ make sure that you​ are not already covered by these policies .​
Should anyone get loan insurance?
Although it​ can be expensive and limited,​ if​ you​ think that loan insurance will give you​ the​ peace of​ mind you​ want and that the​ policy will cover your circumstances,​ then take out a​ policy .​
Although many are a​ waste of​ money,​ there are policies that can help you​ in​ times of​ need,​ and you​ should look at​ the​ policy before accepting or​ rejecting it .​
This will help you​ to​ get the​ best deal for your loan,​ and to​ make sure you​ are covered in​ case you​ cannot keep up with repayments for some reason.

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